OPIM 5894 ADVANCED PROJECT MANAGEMENT
AIRBUS 3XX: DEVELOPING THE WORLD’S LARGEST JET
SURESH NAIR, Ph.D.
Professor,
School of Business
University of Connecticut, Storrs, USA
http://users.business.uconn.edu/snair/opim5894.html
Airbus 3XX: developing the world’s
Largest Commercial Jet
2
Issues Raised
 Basic economics of large projects
 Large upfront expense ($13B) with uncertain returns
 The complexity of estimating demand and revenue
 Role of government as investors and customers
Should Airbus launch this product?
Prof. Suresh Nair, University of Connecticut
Airbus 3XX: developing the world’s
Largest Commercial Jet
3
Team Assignments – Team 1
 Future of Air Transportation and possible Boeing
response
Evaluate how air transportation is evolving – point to point
vs. hub and spoke.
 Resultant demand for VLAs
 Analyze Boeing’s possible competitive response to A3XX
 How would Airbus decisions and Boeing’s response change
due to changes in fuel prices, euro value changes?
 Should Airbus launch A3XX?

Prof. Suresh Nair, University of Connecticut
Airbus 3XX: developing the world’s
Largest Commercial Jet
4
Team Assignments – Team 2
 Break-even analysis
How many planes/year will Airbus have to sell to breakeven?
 Do they have the capacity to produce that many?
 How sensitive is the B/E point to R&D and Operating Margin
changes?
 How does the B/E compare to B747 volumes?

Prof. Suresh Nair, University of Connecticut
Airbus 3XX: developing the world’s
Largest Commercial Jet
5
Team Assignments – Team 3
 Demand Projections
How many A3XX planes do you estimate Airbus be able to
sell per year? Support your answer with quantitative and
qualitative analysis
 What are your assumptions?
 How sensitive is your estimate to these assumptions? Be as
specific as possible.
 What explains the wide variation in forecast for VLA
Passenger aircraft between Airbus (1235) and Boeing (330)
in Exhibit 6 and 8?

Prof. Suresh Nair, University of Connecticut