In the month of July 2000, Airbus Industries' supervisory board is on the brink of approving a $13 billion investment for the development of a brand new super jumbo jet referred to as the A3XX that would seat from 550 to 1,000 passengers. Having procured about 20 orders for the new jet, the board must determine whether there's adequate long term demand for the A3XX to warrant the investment.
At the time, Airbus was anticipating the market for very large aircraft (VLA), those seating more than 500 passengers, would surpass 1,500 aircraft over the next 20 years and would create revenue in excess of $350 billion. Based on Airbus, it could sell as many as 750 aircraft over the next 20 years and needed to sell 250 aircraft to break. This case investigate the two sets of predictions and asks students whether they would carry on with the launching given the size of the indecision and the investment in long term demand.
PUBLICATION DATE: November 29, 2009 PRODUCT #: 210P04-PDF-POR
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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