The two important players of aircraft manufacturing industry: Airbus and Boeing - Essay Example

With the passage of time, Boeing came up with a fuel efficient plane with the name Dreamliner that allowed them to gain competitive edge on the mid-sized airplanes. As airlines have been focusing to reduce the cost and gain competitive advantage by lowering their prices, therefore the demand of this fuel efficient plane increased. This report analyses what variables influence the decision of Boeing’s management to introduce the airplane as well as the risks that the company face. The report also analyses how stakeholders of the firm have been affected and the critical financial analysis of Boeing as it introduces the new plane.

Introduction This report analyses the case of aircraft manufacturing industry. The two important players of the aircraft manufacturing industry are Airbus and Boeing and both of them have been receiving substantial amount of funds from the government to run their operations as well as expand at the same time. Boeing has introduced a new aircraft with the name of Dreamliner 787, and this aircraft has been prepared considering the needs of the airlines. The main objective of several airlines is to reduce their operational cost and with Boeing’s 787, airlines would be able to save around 20% of their fuel cost and this would give them competitive edge.

This report analyses the stakeholders of both the aircraft manufacturing companies; Boeing and Airbus. Also the report analyses what kind of variables would influence the decision of both these companies and the kind of risk faced by these firms. It is important for these two firms to manage their risk in a proper manner so that they are able to achieve stability in the future cash flows. Before the report leads to. This report analyses two important players of aircraft manufacturing industry: Airbus and Boeing and both of them have been receiving substantial amount of funds from the government to run their operations as well as expand at the same time.

Boeing has introduced a new aircraft with the name of Dreamliner 787, and this aircraft has been prepared considering the needs of the airlines. The main objective of several airlines is to reduce their operational cost and with Boeing’s 787, airlines would be able to save around 20% of their fuel cost and this would give them competitive edge.This report analyses the stakeholders of both the aircraft manufacturing companies; Boeing and Airbus. Also the report analyses what kind of variables would influence the decision of both these companies and the kind of risk faced by these firms.

It is important for these two firms to manage their risk in a proper manner so that they are able to achieve stability in the future cash flows. Before the report leads to conclusion and recommendation, a critical financial analysis of Boeing’s 787 has been prepared that explain how important this new aircraft would be for Boeing. There are different variables that influence the investment decision of organisations and same is the case with two competing firms in the aircraft manufacturing industry; Airbus and Boeing.

Building a new aircraft requires heavy investment from the manufacturer and therefore it is important that both of these companies carefully analyse whether the decision should have been profitable or not.