Tag: Airbus

OM in the News: Brain Injuries for Crew and Passengers at Delta

Why is maintenance (see Chapter 17) one of the 10 Operations Management decisions around which our text is based? If you ever fly, today’s post will explain why.

Employees are suing various airlines for toxic fume incidents

Delta Air just announced that it is replacing “additional power units” (APUs) on more than 300 of its popular Airbus A320  jets to stem cases in which toxic fumes have leaked into the air supply and led to health risks for passengers and crew.

The move is one of the most aggressive efforts by a major U.S. airline to address what in recent years has increasingly become a hidden hazard of modern air travel, reports The Wall Street Journal (Sept. 25, 2025). The APU is a third engine that sits in the plane’s tail and is used to generate electricity and pump air into the cockpit and cabin when the two primary engines aren’t running. (For example during taxiing). A leak can also contaminate the air even when it isn’t in use.

A fume event typically occurs when oil leaks into the engine or APU’s compression chamber and is vaporized at extreme heats, releasing neurotoxins and other chemicals into the cockpit and cabin air. Fume events have been surging on the Airbus A320 family and have led to brain injuries and other illnesses in both crew and passengers.

Over the past year, APU-related fumes on Delta’s A320 jets have led to emergency diversions and abandoned takeoffs, pilots donning oxygen masks and passenger vomiting.

The increase in incidents follows changes to maintenance requirements that Airbus began approving from 2017, which allowed airlines to regularly send aircraft back into service after a fume event had occurred.

Two years after the change, Airbus issued a “good practices guide” to help airlines mitigate APU-driven fume events. That included extensive weekly visual inspections to the power unit and a suggestion that pilots wait 3 minutes after turning on the APU  so it might start working properly.

Airbus also suggested a second option–that airlines operate flights with the APU air supply turned off (removing air conditioning on the ground)–if conducting maintenance might cause disruption to their flight schedules.

“Corrective maintenance action can be planned at a better opportunity,” Airbus wrote in 2019. It also reminded airlines that the precautions for mitigating fume events were only an optional guide. But internal maintenance documents show that Airbus was aware of fumes-related issues since 2001.

Classroom discussion questions:

  1. What is the difference between “preventive” maintenance and “breakdown” maintenance?
  2. What are some of the hidden costs of ignoring the maintenance on the APUs?

 

OM in the News: The End of the Jumbo Jet Era

The final convoy of A380 fuselages in France

As we point out in Chapter 5 (and in Figure 2.5) every product has a life cycle, an important issue for operations managers, especially in this time of pandemic flux.  And so it appears that The Queen of the Skies-the iconic Boeing 747– is approaching her abdication. British Airway (the 747’s biggest operator) just announced that its 31 747s will never fly again. Its immediate retirement of its 747s marks the demise of the jumbo plane’s 50-year reign, with similar decisions by Delta, United and Air France, reports Financial Times (July 27, 2020). The last 747 in the Qantas fleet recently flew to its final resting place in the Mojave Desert.

The A380 superjumbo jet’s life cycle  was much briefer. Just 13 years after the first A380 flight by Singapore Airlines, Airbus is ceasing production.  Flying, as it slowly recovers after Covid-19, looks like being smaller, nimbler and point-to-point, rather than in huge aircraft collecting passengers at hub airports. The long-haul planes of the future are the 248-336 seat Boeing 787 and the 350-410 seat Airbus A350.

It was also a Chapter 4 forecasting issue, as Airbus got flying’s economics wrong. In 1999, Boeing and Airbus sparred over how many super-large aircraft the market could support. Boeing said fewer than 400 would be needed by 2019. Airbus said nearly 1,500–but sold only 242. Boeing’s 747 prospered through the decades of explosive growth in airline travel, from 310 million passengers in 1970 to 4.5 billion last year. The 747’s best years are now gone, though it has timed its retirement perfectly.

To make matters worse for Boeing and Airbus, they are still making the smaller planes that airlines aren’t collecting, straining their finances, adds The Wall Street Journal (July 27, 2020). Airlines don’t want the aircraft for now, because they are unable to fill them profitably during a historic plunge in demand for flying. The result: finished airplanes with nowhere to fly, and less cash for Boeing, Airbus and their suppliers as they slash production and payrolls. “Clearly, we’re in a situation where we don’t need any aircraft,” said Delta’s CEO.

Classroom discussion questions:

  1. What should Boeing’s OM strategy be at this point?
  2. Why was Airbus’ A380 forecast so inaccurate?

OM in the News: The Short Life Cycle of a Superjumbo Jet

An A380 landing in Heathrow. Production never met its grand ambitions and output quickly fizzled.

Airbus just announced that it is halting production of the A380 superjumbo plane, abandoning the $16 billion project after airlines around the world flocked to smaller, nimbler jets for long-range travel, reports The Wall Street Journal (Feb. 15, 2019). The A380 was the European company’s answer to Boeing’s 747, which brought long-haul travel to the masses 50 years ago and was the undisputed queen of the skies for decades. The A380, which first went into service in 2007, represented a future for long-distance commercial aviation based on big jets, shuttling between major hubs.

Passengers came to love the plane for its spacious, quiet cabins. Most airlines, though, were less enamored, turning instead to a new breed of fuel-efficient smaller jets that gave them the flexibility to serve less popular routes. A380 sales lost momentum early. Airbus never turned a profit on its flagship plane, and write-offs related to the program weighed on the company for years. This week, Dubai-based Emirates Airline, the A380’s biggest customer by far, cut sharply its plans to buy more of them. Airbus’ CEO said the airline’s decision  left the company with “no basis to sustain production.”

In 2000, Airbus unveiled its superjumbo program, saying it would spend $10 billion to build a 555-seat jet in an effort to supplant its U.S. rival’s 747. But development delays and $6 billion in cost overruns set the project back early. Boeing’s 747 has also fallen out of favor, but more gradually. The aircraft is now made mainly to haul cargo. Only about 230 A380s have been built, versus more than 1,500 747’s. But as we point out in Chapter 5, every product has a life cycle–some shorter than others.

Classroom discussion questions:

  1. Why was the 747 more successful in sales and longevity?
  2. Research some of the reasons why the A380 program was an OM nightmare.

OM in the News: Airplane Supply Chains and the Rolls-Royce Constraint

Workers check a Rolls-Royce Trent 7000 engine on the assembly line of the Airbus factory in France.

A supplier that is quite literally an engine of aerospace supply chains is having trouble powering up, writes The Wall Street Journal (Nov. 1, 2018). Rolls-Royce is warning its aircraft-engine production will fall short this year, adding to the pressure plane makers face in delivering new jets to airlines on time. The British manufacturer blamed the setback on production problems with a new engine, the Trent 7000, used to power Airbus A330neo wide-bodies. It said it would ship 500 rather than 550 airliner engines.

Boeing and Airbus have struggled this year to get planes into customer hands because of production problems. Boeing has had 737 single-aisle planes lined up on the ramp at its Seattle production site awaiting engines. Delays to fuselages also hit production. For Airbus, the Rolls-Royce setback comes at a particularly difficult time. The company is already late with deliveries of its popular A320neo single-aisle planes. Both its engine suppliers, Pratt & Whitney and a joint venture of GE and Safran, fell behind this year on producing engines. The jet makers insist they are catching up, but one key customer says supply chains remain “tremendously constrained and under pressure.”

Airlines are increasingly frustrated by the situation. The CEO of British Airways said “these issues have gone on far too long already.” The airline’s Boeing 787 Dreamliners have been beset by repair problems on their Rolls-Royce engines. Norwegian Air Shuttle, which has had to rent alternative planes because of the same engine problem, this week said compensation payments from Rolls-Royce didn’t make up for the financial impact the struggling carrier has felt.

Classroom discussion questions:

  1. Why are engine suppliers unable to meet commitments?
  2. How many engine suppliers are there? Who are they?

 

OM in the News: Jet Makers’ Supply Chains Under Strain

A plane engine made by CFM remains behind schedule, forcing Airbus to postpone aircraft deliveries

Boeing and Airbus, swamped with orders for new jets, are struggling to deliver them all on time—in some cases angering customers and delaying payments, reports The Wall Street Journal (July 16, 2018). Airbus has missed a number of delivery deadlines, forcing airline customers to find alternatives, change routes or cancel flights. It has delivered fewer planes than it did by this time last year, despite promising 80 more this year. The missed deliveries mean delayed payments because most cash changes hands only upon delivery.

Boeing is straining with the same supplier shortfalls as Airbus. The company has made investments to help manage its suppliers, including in technology to help monitor their performance. Those efforts are crucial, with Boeing poised to deliver more than 800 planes for the first time this year and more than 900 annually by 2020.

For years, booming demand for new aircraft has made it more challenging for jet makers to deliver planes on time to airline customers. A supply-line crunch for items including engines and wing components is now magnifying the strain. The result: Some airlines have been left waiting for months for new planes, angering executives.

Suppliers to Boeing and Airbus have struggled to keep up with the surging demand. Engine-production delays have been among the most painful. At one point this year, Airbus had more than 100 nearly finished planes waiting on the tarmac for their engines. In the first 6 months, the company delivered 303 jets against a full-year target of 800 deliveries, mostly because of late engines. Airbus considered slowing production of planes while the engine makers recovered, but it feared that could disrupt other parts makers, causing further delays.

“The job today is not just about running a factory but running the entire supply chain,” said the head of a major supplier to both manufacturers.

Classroom discussion questions:

  1. What is causing the strain on both firms’ supply chains?
  2. What can the manufacturers do to alleviate supply chain issues such as these? What parts will always be an issue?

OM in the News: Airbus Outgrows its European Supply Chain

Since it was cobbled together from a passel of national aerospace groups a half-century ago, Airbus has spread its operations across Europe in a delicate effort aimed at maximizing political expediency without sacrificing too much economic efficiency. There’s little industrial logic, after all, in shuttling airplane parts among 14 factories in a half-dozen countries, with some wing components crossing the English Channel 9 times before being mounted on planes.

The company’s airliner business employs more than 53,000 people across Europe, reports Businessweek (Feb. 12, 2018). And of the 11,000 passenger jets Airbus has built since it was founded in 1970, all but 400 have come out of the region’s factories. Europe, however, accounts for fewer than 1 in 5 planes in Airbus’s order book, and China, the U.S., and other countries are clamoring for a bigger share of production. A decade ago Airbus opened a plant in China, that’s expected to make 6 planes monthly by 2020, up from 4 now. Production is also ramping up at a factory in Alabama that’s been building Airbus single-aisle planes since 2015.

Airbus already has a global network of suppliers, ranging from Kansas-based Spirit AeroSystems, which produces the central fuselage of the A350, to a Korean Air Group that makes wingtip devices for the A330 widebody, to China’s Xi’an Aircraft, which manufactures wings for planes assembled at the Chinese plant. All told, Airbus has some 12,000 subcontractors in more than 40 countries from Finland to Sri Lanka.

As we note in the Global Company Profile that opens Chapter 2, Boeing also relies on vendors around the globe. The 787 Dreamliner, the first all-composite aircraft, uses components from such far-flung places as Japan and Italy, part of a plan to spread the manufacturing risk among partners.

Classroom discussion questions:

  1. Why is the aerospace supply chain so complex?
  2. What are the advantages and disadvantages of this approach?

OM in the News: Pain in Boeing and Airbus’ Supply Chains

Boeing and Airbus both built more jets last year than ever (763 and 718, respectively), but not enough to ease supply line strain as orders boom. The delivery frenzy has been a boon to both plane makers, lifting profit and share prices. “But it also has strained manufacturing and supply lines around the world,” writes The Wall Street Journal (Jan. 16, 2018).

Airbus and Boeing have already struggled at times to get planes out the door because of a lack of seats, toilet doors, and even engines. Airbus fell short of its target of building at least 200 A320neo planes last year because of lingering engine supply issues. The A320neo is the latest version of Airbus’ best-selling narrowbody jet. It and Boeing’s latest 737s have become the workhorses of both legacy and budget carriers because of their size, fuel savings and versatility. Airbus had 30 planes waiting for engines at year-end, and won’t commit to higher output of the plane until it has monitored supplier reliability for several more months.

Boeing and Airbus ended the year with a combined backlog of 13,129 planes, or 9 years of production at current output levels. To cope, both firms have promised to build even more planes this year—further stretching factories around the world that are already running at full tilt.

Supply chain tightness has spurred supplier consolidation to gain scale and become more financially resilient to afford the investments in production capacity Airbus and Boeing require. United Technologies last year agreed to acquire aircraft equipment maker Rockwell Collins. Rockwell in April closed a $6 billion acquisition of cabin interior specialist B/E Aerospace. French supplier Safran SA is expected to soon close its purchase of seat maker Zodiac Aerospace SA.

Classroom discussion questions:
1. What can Airbus and Boeing do, if anything, to exert better control over suppliers?

2. What do they need to do to reduce the backlog?

 

OM in the News: Boeing and Airbus Change the “Make or Buy” Formula

A Boeing employee working on a vertical fin assembly for a 787 in Salt Lake City. Boeing will start to manufacture some parts for its planes to tap into the lucrative aircraft components market.

“The world’s largest plane makers are testing a seemingly simple formula to smooth production, cut costs and fatten profits: Make more of the parts that go into their jets themselves,” reports The Wall Street Journal (Sept. 8, 2017). Worried about getting squeezed by parts company consolidations (like United Technologies proposed $23 billion takeover of Rockwell), Boeing and Airbus have moved to protect themselves by building more of their parts in-house. This month, Boeing started construction of a new plant in England that will make the motors that help move a wing’s flaps.  The wings for a revamped version of Boeing’s 777 jetliner also will be built at a new plant near Seattle rather bought from a supplier.

Airbus, meanwhile, is planning to build its own nacelles, the metal casings that house a plane’s engines. “We are constantly revisiting our ‘make or buy’ decisions,” said Airbus’ COO.  “The opportunity ahead of us, in terms of transforming how we design and build, how we manufacture, is even greater than some of the product innovation that we’re going to bring to the table,” added Boeing’s CEO.

Boeing and Airbus are slated to deliver new planes worth more than $100 billion this year. Under pressure to deliver all those planes, they have pressed their suppliers for cost savings and deadline commitments. Parts represent more than half the value of each of those planes and are mostly made by dozens of suppliers such as United Technologies, Spirit AeroSystems, and GE. Profit margins for plane makers have averaged 9% over the past 2 years, compared with 14% for “tier one” suppliers such as United Technologies and Rockwell, which make finished parts directly. Margins come in at 17% for tier 2 suppliers, which provide smaller components for those parts.

Classroom discussion questions:

  1. What are the plusses and minuses of changing from “buy” to “make?”
  2. What other reasons are there for Boeing to make its own parts?

OM in the News: Global Sourcing Creates a Giant Backlog at Boeing and Airbus

airbus-sourcing“The aviation industry is bulging with orders for new planes,” writes The Wall Street Journal (Feb.24, 2017). If only it can get them made. There were so many almost-finished jetliners, missing their engines, piled up at an Airbus factory last May that executives joked they were in the glider business. It ceased to be funny when a frustrated Qatar Airways canceled orders for 4 planes that were months overdue.

Airbus and Boeing must build 30% more planes annually than they do now to meet existing orders, in one of the industry’s steepest production increases since World War II. The scale of the ramp-up is putting companies to the test.

Suppliers of seats, toilets and engine parts are stretched to the limit and sometimes falling short. In one of the worst holdups, Pratt & Whitney informed Airbus in September it would ship only 75% as many engines in 2016 as planned. P&W struggled with making the engine fan blades, which initially took twice as long as expected. French aviation-parts supplier Zodiac Aerospace was late delivering business-class seats, which cost about $100,000 each, for new Boeing 787s headed to American Airlines. Zodiac also was late delivering seats and lavatory doors to Airbus for its A350 long-range jet, at a time when Airbus was sharply raising production of that plane in 2015.

Both Boeing and Airbus are making adjustments to cope, retooling factories and tightening oversight of their globe-spanning supply lines. Airbus may dedicate more resources to “supporting and understanding proactively possible hiccups with suppliers in the future,” said its CEO.

Classroom discussion questions:

  1. Why are the supply chains so hard to manage?
  2. Can Airbus and Boeing bring more manufacturing in-house?

OM in the News: Boeing and Airbus Shift to Automated Assembly

A Boeing 777 assembly line at the company’s Everett, Wash., production facility
A Boeing 777 assembly line at the company’s Everett, Wash., production facility

The world’s biggest plane makers are digging deep into the technology toolbox to deliver what they have promised will be an unprecedented boost in airliner production. Boeing and Airbus have racked up record orders over the past several years, thanks to booming demand from global airlines. “Now,” writes The Wall Street Journal (July 9-10, 2016), “they have to deliver all those planes.” To meet the challenge, they are increasingly relying on robots, drones and human workers who wear powered exoskeletons to help them ramp up production in what industry executives say is the aerospace industry’s largest-ever peacetime expansion.

The same march toward automation is sweeping across the manufacturing sector. But for Boeing and Airbus, the sense of urgency is heightened by years of promises made to new customers. The two intend to build 33% more each year by 2020, or around 1,800 planes. Until recently both companies made jetliners largely by hand; but they are learning from the high-volume automotive industry. New production technologies that plane makers are putting in place will help accelerate productivity gains.

Boeing’s new 1.3 million-square-foot Washington facility hosts high-speed robots that lay carbon-fiber tape and automated vehicles that ferry wing components around the factory. Airbus is putting a more automated assembly line in place as it seeks to raise production of its A-320 model to 60 a month in 2019 from the current 45 planes Their facility features automated moving platforms to carry the planes through the assembly process, laser measuring tools to better align components, and adjustable-height robots to drill more than 2,000 holes. Where manual labor is still required, Airbus has started using drones for external inspections of planes, and it has devised a mechanical exoskeleton to boost the strength of workers who bore holes so they can more easily lift the 12-kilogram drill required for the job. The device can also help retain aging but skilled employees.

Classroom discussion questions:

  1. Why is the airplane industry now looking to the auto industry for change?
  2. Why were planes largely made by hand to this point?

 

OM in the News: Airbus Lands in Alabama

The 1st A321 being inspected in the new plant in Mobile
The 1st A321 being inspected in the new plant in Mobile

Mardi Gras came early this year to Mobile, Ala., writes The New York Times (Sept. 20, 2015).  Following a jazz band, a float bearing waving dignitaries and sequined musicians, was a column of flatbed trucks, laden with sections of fuselage, wings and tail components of an A321 jet that had just made the 3-week Atlantic crossing from an Airbus factory in Germany. They were on their way to a new Airbus assembly plant — its first civilian factory in the U.S. “I think Santa Claus has been here, and he’s left us an airplane,” said Mobile’s mayor.

The $600 million plant, on 116 acres, is the culmination of a courtship ritual, one of many playing out across the country as communities vie for attention and investment from foreign companies. Like many states and cities, Alabama and Mobile sweetened the deal for Airbus with generous tax breaks and other financial incentives.  For Mobile, a city of 200,000, the prospect of 4,000 jobs with Airbus and its suppliers proved especially attractive. Unemployment there hovers at 8%, well above the national average.

Airbus’s foray into the U.S. forms part of a longer-term strategy. The company still lags far behind its rival, Boeing, in the U.S. market. As Japanese automakers did a generation ago, Airbus hopes that by producing aircraft that are “made in America,” it will be able to weaken Boeing’s advantage.

Airbus had eyed Mobile for years. The city’s deepwater port could accommodate ships carrying large structural parts from Europe. Freight trains run nearby, and the site, which is equipped with two long runways, is already home to small aviation maintenance companies and parts suppliers. Locating in Mobile would create a natural hedge against exchange-rate swings between the euro and the dollar and reduce some of the cost of transporting the $16.5 billion in components that Airbus buys from American aerospace suppliers each year. Labor costs were also substantially lower compared with Europe, and Alabama has a right-to-work law, which prevents unions from requiring workers to pay union dues.

Classroom discussion questions:

  1. Why Mobile?
  2. What are the disadvantages of opening a plant outside of Europe?

OM in the News: The Battle to Manufacture Planes More Efficiently

The interior of the A350. Airbus used a faster and more ergonomic way to build overhead bins, among other tweaks to ease production
The interior of the A350. Airbus used a faster and more ergonomic way to build overhead bins, among other tweaks to ease production

Production mistakes at a giant Airbus factory a decade ago almost crippled the European plane maker, writes The Wall Street Journal (June 12, 2015). Today, the factory is a model of efficiency and a nexus for the company’s efforts to produce jetliners at an unprecedented clip. After years of racing to develop and market new models, both Airbus and Boeing have clear product lines and backlogs for the next decade. Now, each aims to grab market share by building its planes faster and more efficiently than the other—a gambit both have struggled with in the past.

For Airbus, the lessons being showered on its new A350 (its largest twin-engine jet, designed to compete with Boeing’s 787 and 777), come from the A380. That project caused havoc inside Airbus when wiring problems led to multibillion-dollar cost overruns, furious customers and years of management turmoil. On the new A350, lasers guide computerized clamps that push together giant fuselage sections in a process that is 30% faster and 40% cheaper than on the superjumbo. Thanks partly to such improvements, the A350 project has stayed on schedule and on budget.

Efforts to accelerate production have ranged from reducing vacation days to high-tech innovation. Airbus is introducing a giant inkjet printer to paint the tail fins of its planes. The new printer could slash by almost 90% the 170 hours that workers now need to prepare and paint an ornate airline logo. Airbus says that in a few years the printer could double painting capacity and cut related labor costs by half. Another step to hit the target rollout date was tapping veterans. Managers on the A350 line insisted that at least 70% of workers come from other Airbus programs. Efficiency gains like these are vital because building jetliners is so complex.

Classroom discussion questions:

1. How would you define efficiency (see Chapter 1)?

2. Why is efficiency so important to Boeing and Airbus?

 

OM in the News: Airbus Invents the “Flying Doughnut”

 

The Airbus design would revolutionize air travel
The Airbus design would revolutionize air travel

“Airbus’s design for a future aircraft looks less like a conventional airliner and more like something from a 1950s sci-fi comic,” writes The Financial Times (Nov. 17, 2014). If a patent application filed by the European aerospace and defense group takes off, future passengers could fasten their seat belts in cabins shaped like giant doughnuts – or flying saucers.The UFO-like shape addresses a problem facing aircraft designers. Cylindrical shapes are good at containing the stresses of pressurized cabins, but huge pressures on the cylinder’s front and rear ends need to be managed with strong, heavy structures.

Other futuristic ideas that the company have patented include the idea of an economy class seat for standing passengers shaped like a bicycle saddle; immersive virtual reality helmets for delivering in-flight entertainment; and, most alarmingly of all, a windowless cockpit.

The “flying doughnut”, however, is the company’s most radical reinvention of aircraft structure. The “simple and efficient” solution would involve passengers not only receiving their in-flight meals from trolleys negotiating curved aisles, but also learning an entirely new way of boarding. Diagrams in the patent application show passengers entering the aircraft through steps leading up to doors arranged around the hole in the doughnut’s middle.

The design fits with the concepts some aerospace companies have been considering as they pursue the next step in fuel efficiency. One exec at GE Aviation said designs such as Airbus’s could be aerodynamically more efficient than traditional designs. “It is an approach that reduces the overall fuel burn for the aircraft.”

Classroom discussion questions:

1. Why is this an important OM issue?

2. What are the advantages and disadvantages of the doughnut concept?

OM in the News: Factory Rebound’s Winner–Mobile, Alabama

Austral has increased the workforce at its Mobile shipyard to 4,100 from 900 in 2009
Austral has increased the workforce at its Mobile shipyard to 4,100 from 900 in 2009

The U.S. has added about 650,000 factory jobs since their numbers rebounded after the recession, putting manufacturing workers at 12.1 million and reversing a long decline in such jobs, reports The Wall Street Journal (May 30, 2014). But uneven growth has created regional disparities in the nation’s overall economic recovery.

Mobile, Alabama is among the winners. Shipbuilder Austral Ltd.’s facility here is busy seven days a week as workers piece together enormous aluminum sheets in a space the size of 13 football fields. Airbus and BAE Systems, too, are adding factory jobs here. Mobile created more manufacturing jobs than all but 15 U.S. counties in the past 4 years. U.S. factory-job gains—driven by a range of factors from cheaper domestic energy to the auto-industry recovery—have concentrated in pockets since the recession, particularly in the Southeast and Midwest.

Mobile’s success illustrates some common patterns: Often, companies have added jobs in states with “right-to-work” laws—which allow workers in unionized workplaces to opt out of paying union dues—and where taxes are relatively low, in counties where governments provide large incentives and strong vocational education, and in places with access to ports or other transport hubs.

Austal chose Mobile because of location, waterfront property, cooperative local and state governments, low taxes and low union membership. Alabama’s government sponsored training for Austal workers and built it a $12 million training center.

Airbus Americas, hiring about 1,000 new employees for its first U.S. commercial assembly plant, didn’t consider any Northern states as finalists, as it was looking for a port to which it could ship airplane parts for assembly. Alabama’s right-to-work rules were a key attraction. Alabama gave Airbus tax credits and cash grants valued at $158 million to build in Mobile—including a $6 million training center. “Alabama had it all,” says the Airbus chairman. “I’m not sure the rust-belt states have the same attitude.”

Classroom discussion questions:

1. Evaluate the incentives offered Austral and Airbus based on the material in Chapter 8.

2. What are “right-to-work” states and what advantages do they offer?

OM in the News: Debugging the New Airbus A350 Jet

The A350's curved wingtips reduce drag and increase fuel efficiency
The A350’s curved wingtips reduce drag and increase fuel efficiency

“A million parts, flying in tight formation,” is how BusinessWeek (Feb.17-23, 2014) describes the debugging of Airbus’ latest new plane, the A350. The European company desperately wants to avoid the kinds of problems that have plagued rival Boeing’s 787 Dreamliner. After several production fiascoes, the 787 endured further problems when its lithium-ion battery packs burst into flame. For the A350 to be economically viable, says Airbus, “the airlines need an operational reliability above 99 percent.” That means that no more than one flight out of every 100 is delayed by more than 15 minutes because of technical reasons.

To ferret out the flaws in an airplane, Airbus technicians have come to depend on sophisticated computer systems. These, too, can introduce problems. Like the A350, the A380 superjumbo was designed entirely on computers, but engineers working in the company’s German and French operations hadn’t used the same versions of the design software. When assembly line workers started installing bundles of wires, they discovered that the German software had miscalculated the amount of wiring needed for the fuselage, which had been designed on French software. Miles of wiring turned out to be too short and had to be torn out from half-completed airframes and replaced.  In 2011 and 2012, cracks were found within the A380’s wings, prompting authorities to order the entire fleet to undergo detailed inspection of the structural integrity of the plane. To minimize the chances of that occurring in the A350, Airbus is putting the airframe sections through more than 80,000 simulated takeoff and landing cycles.

But much of the work is done by suppliers, not by Airbus itself. While the company might look to the outside world like an aircraft manufacturer, it’s more of an integrator: It creates the overall plan, then outsources the design and manufacture of the parts, which are then fitted together. “We have 7,000 engineers working on the A350,” says Airbus, “and at least half of them are not Airbus employees.”

Classroom discussion questions:

1. Why was development of this new plane so difficult?

2. Why did Airbus decide to make a new plane, as opposed to migrating from an older model such as the A330 (see Chapter 5)?