Macro-Environmental Forces
Economic issues can significantly impact the success of the Boeing Dreamliner (7897) and Airbus A350 programs. For instance, the cost and manufacturing of the airplane may be affected by the price and availability of personnel and supplies. Recessions or economic downturns may also limit airlines’ capacity to buy brand-new aircraft, which might jeopardize the effectiveness of these initiatives.
Legal considerations may significantly impact the Dreamliner and A350 projects’ success. For instance, if regulatory bodies like the Federal Aviation Administration (FAA) find safety issues, they can postpone or interrupt the certification process. It might result in significant manufacturing and delivery delays and negative press that could damage the reputation of the aircraft and the businesses that make them.
Social and environmental elements, including public perception and preferences, can also influence the success of the Dreamliner and A350 programs. For instance, worries about ecological sustainability may affect the demand for more environmentally friendly and fuel-efficient aircraft, which might help these initiatives succeed. Weather, geography, air traffic, noise regulations, and environmental legislation are some of the significant ecological elements that can substantially influence the aviation business. The operation of airplanes might be complex in regions with many thunderstorms, hurricanes, and severe winds. Due to the lower air density at high-altitude airports, specific aircraft designs may be necessary.
Air traffic is also a significant concern since it can lead to delays and congestion at crowded airports. ETOPS (Extended-range Twin-engine Operational Performance Standards) is a vital issue influencing the aviation sector, notably for long-haul flights. A set of rules called ETOPS limits how far a twin-engine plane can travel from a suitable diversion airfield (Purwaningsih et al., 2018). In the case of an engine failure, this standard guarantees the safety of passengers and crew.
The condition of the world economy is the most crucial variable that might stimulate or restrain demand for Boeing and Airbus goods. When the economy is doing well, more people and businesses are prepared to spend money on travel because they have more spare cash. In contrast, air travel tends to decline as people and companies cut back on non-essential spending during economic downturns.
When the economy is robust, airlines may want to increase their fleet sizes to satisfy rising demand. On the other hand, during a recession, airlines may cut their fleet size, postpone or cancel new aircraft purchases, and put off maintenance on current aircraft. For example, the quest for excellent fuel economy and fewer carbon emissions reflected not just environmental concerns but also customer expectations for more sustainable air travel.
Airlines that run more fuel-efficient planes may differentiate themselves in the market and appeal to clients who are becoming more environmentally sensitive. Customers’ expectations for more flexible travel alternatives drove the expanded range and cargo capacity demand. As air travel becomes more accessible and inexpensive, customers are asking for more convenient and direct routes, necessitating aircraft with more outstanding range capabilities.
Operational and Financial Challenges with the Boeing 787
The introduction of Boeing’s B787 Dreamliner caused several issues for airlines. The underlying issue is the enormous issues airlines have experienced with the introduction of Boeing’s B787 Dreamliner. These difficulties include substantial training for pilots and ground staff to adapt to new technology and systems, production delays and setbacks, and operational and infrastructural improvements.
The fundamental cause of the problems encountered by airlines following the introduction of Boeing’s B787 Dreamliner may be ascribed to a mix of decisions taken by numerous parties engaged in the aircraft’s design, manufacture, and marketing. Boeing included new technology and systems in the Dreamliner to improve fuel efficiency and passenger comfort. However, these advancements necessitated considerable testing and certification, resulting in production delays and difficulties. Furthermore, Boeing’s decision to employ lithium-ion batteries in the Dreamliner’s electrical system proved troublesome, resulting in safety concerns and a temporary grounding of the whole fleet.
Airlines’ challenges since the introduction of Boeing’s B787 Dreamliner can be ascribed to several parts of the marketing mix. The Dreamliner’s innovative features, such as its larger size, increased range, and cutting-edge technology, require extensive training for pilots and ground crew to function well. Airlines faced considerable challenges because they had to spend money on additional training programs to adapt to the new systems.
The Dreamliner was substantially more expensive than earlier versions, posing financial issues for airlines that had spent extensively acquiring the aircraft. Airlines may continue to suffer short-term financial losses due to flight cancellations and schedule modifications brought on by production bottlenecks and setbacks. They may also incur additional costs due to the cost of integrating the Dreamliner into their fleets, which includes upgrading airports and maintenance facilities. In the long term, airlines may find it challenging to reach their financial and operational objectives due to the difficulties of operating the Dreamliner. They could also find it difficult to compete with other airlines that don’t have the same challenges, resulting in a loss of market share and profitability.
The Airbus A350 XWB
The A350 XWB is a more recent and technologically sophisticated variant of the A350, featuring passenger comfort, fuel efficiency, and operational flexibility enhancements. It has a more aerodynamic design, cutting-edge materials, and efficient engines, making it more economical and ecologically benign. Additionally, the aircraft has a more extensive range than the A350, giving carriers more freedom to design their routes.
By selecting the A350 XWB, Airbus may gain a competitive edge and increase its market share for long-haul passenger aircraft. By providing a plane with better features and performance than the Dreamliner, Airbus may attract airlines searching for the most cutting-edge and effective aircraft. If the development of the A350 XWB is sped up, Airbus might gain a competitive edge over the Boeing 787 Dreamliner and 777X by bringing the aircraft to market earlier. If there is a substantial demand for a more modern and practical long-haul passenger aircraft, this would be highly advantageous.
Strategic Options
There are several approaches Airbus might take into account if it wants to compete with the 777X and 787 Dreamliner from Boeing. Instead of creating a new model, one alternative is to improve the A350’s capabilities. It would include increased operating flexibility, passenger comfort, and fuel economy. Airbus might provide a more modern and competitive aircraft by improving the A350 rather than taking on the risks and expenses of creating a new model. Additionally, Airbus could make and sell the improved A350 by utilizing its current customer base and supply network, lowering manufacturing costs and growing its market share.
Another tactic that Airbus can consider is to concentrate on creating a new airplane type that is much more cutting-edge and effective than the A350 XWB. It would necessitate large production, marketing, and research and development expenditures. However, it may give Airbus a sizable competitive edge in the long-haul passenger aircraft industry and allow it to take more significant market shares. Finally, Airbus may consider incorporating other aircraft into its product line, including regional jets or narrow-body airliners. This could increase the variety of its revenue sources and its market share.
Reference
Purwaningsih, R., Pritandari, L., & Santoso, H. (2018). Cost-benefit analysis of flight extended operations (ETOPS) for Garuda Indonesia Airways. SHS Web of Conferences, 49(5), 43–56. Web.