Since 2005, Airbus, one of the two world's biggest airplane manufacturers, has encountered huge delays in the delivery of the new model called A380 to its customers (see appendix 5), mainly passenger air carriers, across the world. This study analyses the characteristics of Airbus and the way it reacted to this issue from a marketing point of view and aims at giving strategic alternatives and recommendations to the aircraft producer. From a business-to-business marketing point of view, the key lesson will be the importance of trust and long-term dependency relationships in huge ventures such as the A380 project, and how trust, kept alive through clear communication, can be a mean to overcome the biggest issues.
[...] On the other side, Airbus suppliers were also very dependent on the revenues of these orders to pay the wages of their workers Analysis The organization and its position in the industry A general overview Airbus is a subsidiary of European Aeronautic Defense and Space Company (EADS). Airbus has a leading position in the aircraft industry. However, Airbus has to share this leading position with Boeing, its only strong rival. Between 1990 and 2006, the market share of annual deliveries for Airbus grew from 15 to 52% (Datamonitour, Company Profile). [...]
[...] Throughout the whole story of delays, Airbus opted for clear and transparent communication to inform customers that the delays are also in their benefit. All airlines affected had been told of the delay very early. The European aircraft supplier tried to reduce uncertainty as far as possible, even though almost everything seemed so uncertain. Airbus made their customers understand that bungling, just to respect the deadlines, is irresponsible and would surely have devastating consequences for Airbus' and the consumer's reputation Recommendations and Implementations As the delays resulted mainly from the internal structure of Airbus and from the supply chain management, the following recommendations mainly focus on the relationship between Airbus and its suppliers. [...]
[...] Available from http://deesjournalisme.blogg.org/date- 2006-10-06-billet-449488.html. James Wallace. New airbus delay could be boeing boon [cited March 11 2008]. Available from http://seattlepi.nwsource.com/business/287445_airbusdelay04.html. Melissa Campanelli. Airbus delays push FedEx express purchase of boeing 777 freighters [cited March 11 2008]. Available from http://www.dmnews.com/Airbus-delays-push-FedEx-Express-purchase-of-Boeing- 777-Freighters/article/93351/. Airbus delays push FedEx express purchase of boeing 777 freighters [cited March 12 2008]. Available from http://www.bloomberg.com/apps/news?pid=20601085&sid=adjAi_ZE0m2o&refer=europ e. Nelson D. Schwartz. Big plane, big problems [cited March 12 2008]. Available from http://money.cnn.com/magazines/fortune/fortune_archive/2007/03/05/8401277 /index.htm. Nils Pratley. The risks justify baling out of airbus [...]
[...] The trust in Airbus declined consequently Conclusion Even though the huge delays were projected to destroy Airbus's reputation and trustworthiness, the airplane manufacturer surprisingly managed to keep the big majority of its customers and suppliers onboard. The delays were “unacceptable” for most of the clients and suppliers, who incurred high costs because they had to reorganize their entire planning. However, the A380's appeals and the communication strategy adopted by Airbus to keep trust and the relationships among all channel members at a high level were sufficient to keep the strongly dependent customers and suppliers loyal to the European manufacturer. [...]
[...] The different types of compensations conceivable for Airbus were refunds in cash, discounts on future aircraft orders or the leasing of other Airbus planes for the time customers had to wait for the A380 to be effectively delivered. But also the suppliers were asking for payments in advance from Airbus, which were unable to pay their suppliers in time because they couldn't deliver the final product to their customers. Suppliers had to cover the expenses related to the A380's production. [...]
Online readingwith our online reader
Content validatedby our reading committee