OFFICIAL ASSIGNMENT COVER SHEET

Students Mr Ranjeet Desai, Mr Rajendra Sing Rao, Mr Neeraj Gautam, Mr RD16719 &
Name: Ritesh Tiwari, Mr Mukilan Nakkeeran Student Number: Team

ECO701-
Assignment Number: 1909-1 Title: Grp_ ALP_ Boeing Versus Airbus Market Outlook 2019-38

Professor’s Name:

Due Date: 11.11.2019 Subject Code and Name: ECO701 - Data Analysis for Managers

DECLARATION OF ORIGINALITY OF WORK:

I affirm that the attached work is entirely my own except where the words or ideas of other writers are specifically
acknowledged through the use of inverted commas and in-text references. This assignment has not been submitted for
any other subject at GlobalNxt University or any other institution. I have revised, edited, and proofread this paper.

(To input your electronic signature, double-click on this box and select ‘checked’) Word count: 2137

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1 Critical thinking - analysed, critically, the
issues using appropriate concepts and
methods.

2 Relevance – ideas and arguments were

highly relevant to the problem

3 Originality – novel ideas were introduced

and explained with substantial depth and
detail

4 Justification – arguments were convincingly

supported with relevant readings and data

5 Presentation and articulation – ideas were

expressed in a clear and concise manner

* S = satisfactory; U = unsatisfactory. To achieve a Percentage:

passing grade, criterion number 1 must be assessed as
satisfactory.

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 Boeing Versus Airbus Market Outlook 2019-38
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Project by Team 6:

ABSTRACT: This document is a response to the questions asked as a part of the Action Learning
Project where the team is required to express the view over assigned reports.

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Brief About Airbus:

It is a European multinational aerospace corporation that stood as the world's second biggest

aerospace and defense company in 2018, behind only their primary competitor, Boeing. The

company has three divisions: Commercial Aircraft, Defense and Space, and Helicopters, the third

being the largest in its industry in terms of revenues and turbine helicopter deliveries. 74%

Revenue generated in airbus by manufacturing commercial aircrafts and remaining 26% by

Defense and space & Helicopters manufacturing.

Brief About Boeing:

Boeing is the world's largest aerospace company and leading manufacturer of commercial

jetliners, defense, space and security systems, and service provider of aftermarket support.

Boeing has a long tradition of aerospace leadership and innovation. The company continues to

expand its product line and services to meet emerging customer needs. Boeing is organized into

three business units: Commercial Airplanes; Defense, Space & Security; and Boeing Global

Services, which began operations July 1, 2017.

Boeing has been the premier manufacturer of commercial jetliners for decades. Today, the

company manufactures the 737, 747, 767, 777 and 787 families of airplanes and the Boeing

Business Jet range.

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 Q1) Compare specific data analyses on similar data in the two reports that contradict each other/

are least supportive of each other.

Ans:

1. New Deliveries

New deliveries 2019-2038

Latin
Category Africa Asia-Pacific CIS Europe Middle East North America Total
America
Airbus 1269 16543 1540 7539 2696 3245 6378 39210

Boeing 1160 17390 1280 8990 2960 3130 9130 44040

Airbus confirmed long term growth potential for industry demand for 39,210 new passenger
aircraft and freight aircraft over the next 20 years, whereas Boeing confirmed potential of increase
in demand by 44040 aircrafts with 19210 replacements which is 44% of deliveries and 24830 are
growth which 56% of deliveries.

2. Total Fleet

Total Fleet 2038

Region Airbus Boeing
Africa 1,660 1,620
Asia-Pacific 20,009 19,420
CIS 1,870 1,940
Europe 9,271 9,340
Latin America 2,995 3,380
Middle East 3,524 4,030
North America 8,354 10,930
World 47,684 50,660

Airbus planned the Passenger & Freighter fleet to 47684 of Airbus GMF19 & 47990 of GMF18
by 2038 whereas Boeing planned a newer Generation of More Efficient Airplanes Will Replace
Older Aircraft and Provide Capacity for Growth by 50660 total fleet.

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 3. Growth Rate

Company Name Airbus Boeing

Year 2019 2019
RPK Growth 5.0% 4.6%
GDP Growth 2.7% 2.7%
Million Passenger +200 199.4
Record Load Factor 82.10% +80.0%

a) Revenue Passenger-Kilometer (RPK) of Airbus is 0.4% more than Boeing and Airbus GMF

2019, 4.3% growth per annum. Boeing has a 4.6% RPK in 2019 and in regional basis South

Asia has the highest RPK i.e. 7.4% and Northeast Asia has lowest RPK i.e. 1.9%.

b) GDP growth for both the companies are same recorded for the year 2019.

c) Million passenger travel for airbus is +200 whereas for Boeing it was 199.4 which less but

comparatively has no much difference.

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 4. Region wise comparison:

Region Asia-Pacific Middle East CIS Europe Africa North America Latin America

Compan Boei Boei Boei Boei Boei Boei Boei

Airbus Airbus Airbus Airbus Airbus Airbus Airbus
y ng ng ng ng ng ng ng
Deliveri 17,3 16,54 3,13 1,28 8,99 1,16 9,13 2,96
3,245 1,543 7,539 1,269 6,378 2,696
es 90 3 0 0 0 0 0 0

Data Data Data Data Data Data

Data not
Fleet 4.60 not 4.90 not 2.10 not 2.90 not 4.00 not 1.90 not 3.90
availabl
Growth % availa % availa % availa % availa % availa % availa %
e
ble ble ble ble ble ble

GDP 3.90 3.20 2.00 1.60 3.40 1.90 2.90

4.10% 2.90% 2.10% 1.50% 3.60% 1.90% 2.90%
Growth % % % % % % %
Traffic 5.50 5.10 3.30 3.60 5.90 3.20 5.90
5.40% 5.60% 3.70% 3.30% 4.80% 3.00% 4.30%
Growth % % % % % % %

Airplan Data Data Data Data Data Data

Data not
e 2830 not 725 not 160 not 1370 not 175 not 1155 not 395
availabl
Market B$ availa B$ availa B$ availa B$ availa B$ availa B$ availa B$
e
Value ble ble ble ble ble ble

Data Data Data Data Data Data

Data not
Services 5.10 not 4.70 not 2.70 not 3.30 not 5.00 not 2.80 not 4.70
availabl
Growth % availa % availa % availa % availa % availa % availa %
e
ble ble ble ble ble ble
Services
3480 1829 790 515 270 177 1980 1075 215 138 1865 898 500 268
Market
B$ B$ B$ B$ B$ B$ B$ B$ B$ B$ B$ B$ B$ B$
Value
SHARE
OF
2019-
2038 40% 42% 46% 8% 85% 4% 0% 19% 75% 3% 63% 17% 0% 7%
NEW
DELIVER
IES

5. Productivity KPI: The improvement in productivity has been a key driver for growth

 Daily utilization

Airbus: Daily utilization in 1998 was 8.4 hrs/day and in 2018 it was 10.7 Hrs/Day 2 hrs/day

utilizations has increased.

Boeing: Airlines may also carry increased numbers of passengers through fuller airplanes, adding

seats to each cabin, using larger airplanes, and increasing airplane utilization.

 Load factor:

Airbus: Load factor in 1998 was 69% whereas in 2018 it was 82% which is 13% more as compared

to 1998.

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Boeing: Load factor in 1990 was 65% but is increased to 80% in 2019 which is 15% more as

compared to 1990.

Q.2: Which analysis in your view is most crucial for Boeing as well as Airbus to secure a

larger market share?

Ans:

Airbus:

Revenue passenger kilometers (RPK) is a measure of the volume of passengers carried by an

airline. A revenue passenger-kilometer is flown when a revenue passenger is carried one

kilometer. A passenger for whose transportation an air carrier receives commercial remuneration

is called a revenue passenger.

Traffic forecast charts help to understand the Top 20 traffic flows (RPK).

One chart shows the sectors where traffic may increase more than 3 times and the other one

highlights sectors where the traffic may increase by more than 1 times.

It can be seen from the first chart that Domestic – India (4.8 times) is the region where maximum

increase in RPK is expected moving from 2018 to 2038 (Next 20 years).

On the other hand, in terms of max RPKs, Domestic – PRC (Public Reunion of China) is the

highest with outlook to touch nearly 2250 RPKs (In Billion).

These 2 charts will be helpful, to take a decision on which zones to be targeted by Airbus

depending upon its fleet capacity, ROI & logistical feasibility.

Further, the slides showing Origin & Destination traffic, shows that from 2018 to 2038, China &

India have an estimated increase of 8% to 11% and 6% to 8% respectively in terms of CAGR

(Compound Annual Growth Rate).

Therefore, these slides should also help to justify the decisions made based on earlier 2 slides.

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Boeing:

In case of Boeing, there are multiple slides which gives in-depth knowledge of how the future

looks like and which are the areas to be targeted for increasing the market share.

To start with, graphical presentation of Top Global Traffic Flows shows that in the next 2 decades,

maximum growth in RPKs is expected to be in China & Asia Pacific zones (6.2% & 5.5%

respectively).

Similarly, through Air Cargo Growth graphical presentation shows that in the next 2 decades,

maximum growth in RPKs is expected to be in routes of East Asia – North America & East Asia -

Europe (4.6% & 4.5% respectively).

Additionally, graphical representation of projected Commercial Aviation Services Market Demand,

shows that nearly 5% growth potential in Asia Pacific, Africa, Latin America & Middle East.

Pie chart showing Traffic forecast in 2038 shows that of the 100% RPK share, Asia Pacific is the

highest with 32%.

We feel, in terms of Passenger movement, analysis on Top Global Traffic Flows will be helpful &

in case of freight carriers, analysis on Air Cargo Growth should help for decision making.

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Q 3: Identify segments in both the reports that could be improvised further by including

additional data analysis/ modelling of some sort?

If we see Boeing,

1) The report shows region-wise shows the total Delivery Units that the Airline caters to and after

that demonstrates the Traffic flow region wise. One such example of region-wise is shown

below. In my view, it is also essential for the analysis to also show or detail the breakdown of

the delivery units, specifically catering in each region. It will help the Airline to understand

which delivery unit will do well in that specific region. Currently, that data is missing.

2) We also see that in the Executive Summary doesn’t provide any competitor details and its

performance which can be compared with data points of Boeing.

3) Operating cost analysis is missing in both the reports

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4) Impact of CO2 emission goal is missing in the report of Airbus, which is very crucial

certification for airplane production

5) Probability distribution and Regression analysis can be added to both reports as both

companies are providing data of very long term 20 years and short term factors are missing,

such as changing climate, changing needs of Aviation regulatory bodies like FAA & CAA,

changing world economics, also we can do short comparison for 2 years or structure data on

yearly basis, risk analysis of changing political factors.

Probability Distribution

A probability distribution is a statistical function that identifies all the conceivable outcomes

and odds that a random variable will have within a specific range. This range is determined

by the lowest and highest potential values for that variable. For Boing & Airbus, if a company

expects to bring in between lowest and highest in monthly revenue, the graph will start with

least at the low end and highest at the high end. The graph for a typical probability distribution

resembles a bell curve, where the least likely events fall closest to the extreme ends of the

range and the most likely events occur closer to the midpoint of the extremes.

Sales Predictions

A major application for probability distributions lies in anticipating future sales incomes.

Companies of all sizes rely on sales forecasts to predict revenues, so the probability

distribution of how many units the firm expects to sell in a given period can help it anticipate

revenues for that period. The distribution also allows a company to see the worst and best

possible outcomes and plan for both. The worst outcome could be 100 units sold in a month,

while the best result could be 1,000 units sold in that month.

Risk Assessments

Probability distributions can help companies avoid negative outcomes just as they help predict

positive results. Statistical analysis can also be useful in analyzing outcomes of ventures that

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 involve substantial risks. The distribution shows which outcomes are most likely in a risky

proposition and whether the rewards for taking specific actions compensate for those risks.

Scenario Analysis

Probability distributions are highly useful in producing tools to evaluate various business

scenarios. Scenario analysis employs probability distributions to show numerous distinct

possible outcomes stemming from a specific action or consequence. This analysis often

involves examining the worst-case, best-case and most likely scenarios given the probability

distribution for that action.

Reference:

https://www.boeing.com/company/general-info/

https://www.airbus.com/company/we-are-airbus.html

https://en.wikipedia.org/wiki/Airbus

https://www.boeing.com/resources/boeingdotcom/commercial/market/commercial-market-

outlook/assets/downloads/cmo-sept-2019-report-final.pdf

https://www.airbus.com/aircraft/market/global-market-forecast.html

Thank you

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