How Boeing Lured Airbus Into Now-Busted A380

Forbes | 2/24/2019 | Staff
Claw987Claw987 (Posted by) Level 4
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Airbus just announced that it would stop producing its Superjumbo A380.

It's an outcome that rival Boeing anticipated about 25 years ago when it outplayed Airbus with a brilliant bit of judo strategy (using Airbus's strength against itself), according to my 2008 book, You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing.

A380 - Times - Emirates - Flight - Economy

To be sure, I've flown in the A380 to Dubai a few times and found the Emirates flight to be very comfortable -- even in economy class.

On February 14, Airbus announced that with Emirates orders tapering off, it would stop making A380s in 2021, according to the Wall Street Journal.

Existence - A380 - Product - Boeing - Advantage

But the very existence of the A380 was a product of Boeing cleverly taking advantage of Airbus's ambition to defeat Boeing in the market for jumbo jets -- thus diverting it from trying to replicate what Boeing thought would be the far more successful 787.

Boeing's ability to envision and create the future gives me optimism that it can sustain the 26% average annual stock price increase that it has generated over the last decade. (I have no financial interest in the securities mentioned in this post).

Journal - Airbus - A380 - Boeing - Year

As the Journal reported, in 2000, Airbus bet over $10 billion on the 555-seat A380 because it wanted to replace Boeing’s 50 year old 747 jumbo jet. The A380 went over budget due to development delays and while passengers liked the plane, airlines preferred Boeing's 787 Dreamliner or Airbus’s A350.

The decision to end the A380 comes in the wake of recent order cancelations. The Journal noted that last week Qantas "formally canceled an order, placed in 2006, for eight more A380s." Singapore Airlines is selling its first two A380s for scrap and Emirates -- which bought 123 of the planes -- will take delivery of the last 14, according to the Journal.

A380 - Denouement

This A380 denouement...
(Excerpt) Read more at: Forbes
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