COMPANY PROFILE -Airbus
Business Sector :Aerospace & Defense
Operating Geography :France, Global
About Airbus :
Airbus is the global leader in aerospace industry. It was established in 1998 and is headquartered in Leiden, Netherlands. It manufactures, designs and delivers aerospace products, services and offers solutions in aerospace at a global scale. It offers a comprehensive portfolio of commercial aircrafts, helicopters, defense aircrafts and satellite systems. Airbus’ core business activity is in complex systems integration and it holds market leadership in Europe in tanker, combat, transport and mission aircraft production. Its market cap was $59.5 billion as of May 2017. Airbus employee strength as of early 2018 is 1,29,442. Airbus has its operations in Europe, Americas, Africa and Middle East and in Asia. It ranked #94 in Fortune Top 500 in 2017.
Airbus is a shareholder of the missile systems provider MBDA and a major partner in the Eurofighter consortium. It also owns 50% stakes in ATR, the turboprop aircraft maker, and Airbus Safran Launchers, manufacturer of the Ariane 6 launcher.
Airbus USP or Unique selling proposition lies in being the international pioneer in the aerospace industry and a worldwide leader in designing, manufacturing and delivering aerospace products, services and solutions to customers on a global scale. Airbus mission is “aim for a better-connected, safer and more prosperous world.”
Airbus vision statement reads “Airbus is an international pioneer in the aerospace industry. We are a leader in designing, manufacturing and delivering aerospace products, services and solutions to customers on a global scale. We aim for a better-connected, safer and more prosperous world.”
Airbus Revenue :
€ 66.8 Billion- FY ending 31st Dec 2017 (y-o-y growth – Almost 0%)
€ 66.6 Billion- FY ending 31st Dec 2016
Ownership / Major shareholders :SOGEPA (French State) - 11.1%, GZBV (German State) – 11.1%, SEPI (Spanish State) - 4.2%
Competitive Analysis of Airbus
SWOT / TOWS analysis of Airbus is a framework to assess the factors that create an impact on the aerospace industry at large and wield its influence on Airbus. The SWOT analysis gives insights into the internal and external factors, namely, strength, weakness, opportunity, and threats of Airbus. Airbus owns a market share of 59.4% making it a global market leader in the aerospace industry. Airbus’s major competition is Boeing with a market share of 40.6%. Airbus receives a strong support from the Airbus group- its progenitor company, therefore it has successfully persisted despite stiff competition. Airbus uses the most innovative methods while developing a product and hence is an expert in entering into new markets and making a success out of it. Buoyed by strong order backlog and sharp rise in profits, Airbus shares have touched all-time high in 2018 .
Innovative products, successful acquisition and mergers, superb performance in all fields, Good ROI and excellent customer satisfaction are the major strengths of Airbus, creating a competitive advantage to the company over its peers and competitors. Airbus production cost is much higher than that of its rival- Boeing, this weakness has affected the share price of the Airbus group by approximately 26%. In 2017, Airbus did not perform well in the defense and space segment leading to a downfall in the revenue. Entering into a new market and becoming successful has been Airbus’s forte, this strength of the company opens the door for golden opportunities of expanding its territories, increasing sales and market share. Another opportunity lies in investing and employing advanced technology, which can ramp up production and deliver faster results. As mentioned earlier in the report that Boeing is the toughest competitor of Airbus. Boeing always comes up with something unique that constitutes a threat and challenge to Airbus. With so many opportunities accessible to all players in the aerospace industry, the competition is going to get tougher for Airbus.
The SWOT analysis of Airbus is presented below in a nutshell followed by the detailed analysis report.
|1. Strong momentum in commercial aircrafts|
2. Competitive portfolio due to strong backlog
3. Strategic fields of action for ramp-up
4. Global player with leading market share
|1. Lacklustre performance in defence and space segment
2. Sluggish demand for helicopters
3. Compliance irregularities leading to corruption probes
|1. Growth opportunities in developed economies|
2. Achieve global market leadership in defence and space segments
3. Development of Unmanned Aerial Systems (UAS)
|1. Cyber Security risks
2. Stiff Competition from other global players
3. Over-dependence on Suppliers
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Detailed SWOT Analysis of Airbus
1. Competitive portfolio due to strong backlog: 75% of Airbus’s backlog is from its international operations which strengthen its efforts to globalize gain global footprint. Airbus has accumulated diverse backlog of 7,265 commercial aircrafts in 2017. It gave the group strong commercial momentum with faster annual delivery rates. It also gives it competitive edge and enhance its market presence. The heavy and super-medium helicopters’ backlog stood at 692 units which help in on-time, on-cost and on-quality deliveries. Strong backlog supports higher revenues, liquidity and better credit rating which generates investor confidence in the group which gives access to long-term hedging.
2. Strategic fields of action for ramp-up: Airbus has a large market base across the globe because of its strategic ramp-up plans. It is making its helicopters and aircrafts more competitive globally through recurring cost convergence, ground-breaking innovations for value addition and value creation. It is working on insourcing nacelle to boost aircraft performance and to create low cost carriers. The defence segment is now building up more on the high-performing businesses like missiles, launchers, combat and transport aircraft as some of them are backed by government funding. It is expanding its global footprint by increasing productivity through development of cutting edge technology to deliver services with longer lifecycles to leverage their competitiveness. The group’s financial strength as reflected by 189% increase in net income and net cash position which increased from € 13.4 billion in 2017 (€ 11.1 billion in year-end 2016), can help Airbus sustain profitable growth trajectory.
3. Strong momentum in commercial aircrafts: Airbus has developed a diverse aircraft line-up for meeting different geographies’ unique needs. This helped Airbus’s commercial aircraft revenue grow to €50,958 million recording a 3.5% growth and EBIT grew to 3,428 million euros in 2017. It has a comprehensive portfolio in commercial aircrafts with jetliners with capacity from 100 to more than 600 seats. Its single-aisle A320 is the best-selling product line in civil aviation. It is the market leader in France, Germany, Spain and the United Kingdom. ATR is being operated by more than 200 airlines in over 100 countries. The strong momentum is due to global presence, diverse customer base & commonality in airframes, on-board systems, cockpits and handling characteristics which optimizes airlines’ costs.
4. Global player with leading market share: Airbus has an extensive global footprint with presence in Europe, Americas, Africa and Middle East and Asia. It held 55% net market share in 2017 and 51% by revenue. It has strengthened its market leadership in UK helicopters market with 46% share in the civil and Para public market efficiencies in the UK defence helicopter market. It has increased its presence in Asia-Pacific region’s aircraft market that accounts for half of Airbus’ deliveries worldwide. It has gained market leadership with 65% share in new business in the region. With the growth in air traffic and anticipation of Asia- pacific region becoming the world’s largest aviation market, Airbus can consolidate its position further to become leader in other segments. Its A350 XWB is the new long-range leader. Market leadership helps in leveraging the know-how of civil business globally.
This section is available only in the 'Complete Report' on purchase.
This section is available only in the 'Complete Report' on purchase.
1. Cyber Security risks: The sophisticated nature of Airbus’ business and increased use of IT has increased its risk exposure to cyber-attacks. It can be due to intentional and hostile, accidental or negligent factors. It risks information and communication systems as the use of cloud services & Internet of Things has grown. The attack can be industrial espionage, systems sabotage, data breaches of confidential data, personal data and intellectual property and data corruption and availability. It suppers manufacturing if control systems are attacked. It can damage Airbus’ reputation if business data and information flows into media and social networks and can cause financial loss & harm intellectual property.
2. Overdependence on Suppliers: The non-performance of Airbus’s suppliers adversely affects its operations and financial performance. This risk increases as the group increases its global presence as threat of supply disruption grows in case of political unrest or natural disasters. The supply chain can be disrupted on non-performance as supply of materials and parts is disrupted. Delivery time lags leads to risks of product liability, delayed production and uncertain backlogs, order volumes and even future order intakes. Its operations can be disrupted as mitigation does not assure protection against this risk. If suppliers are exposed to financial constraints, then they may even require bankruptcy protection which could negatively affect the group’s financial condition.
3. Stiff Competition from other global players: The number of players in the aerospace industry is growing in all of Airbus’ operating geographies which call for more specialised engineering, manufacturing and marketing capabilities. If Airbus is not able to develop solutions to meet the changing market demands then they may lose their market share to the new entrants like ILS, SpaceX, ULA, Sea Launch and CGWIC which can reduce revenue and profitability. Their suppliers and customers can also mimic its products or services and substitute Airbus. In international markets it may lose bids to other stronger global and local competitors such as Boeing and Bombardier. Thus, a competitive disadvantage can adversely affect its business.
Major Brands :Airbus, A350, A380, EADS, Dornier 1Consulting
Key Business Segments / Diversification :
Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :
|Bombardier's C Series aircraft programme||Commercial Aircraft||2017||Acquisition of majority stake (50.01% interest in CSALP)||Extend product offering in a fast growing market segment while expanding our industrial footprint in North America.|
|Navtech||Airline Operations Software||2016||Acquisition||Strengthens Airbus Commercial Aircraft's provision of end-to-end flight operations services.|
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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
- Summary of Airbus history, founders, its corporate headquarters, owners & stakeholders and revenue jumps
- Comprehensive company analysis to gain knowledge about company information, company profile, business model, business plans and marketing strategy
- A study of the major internal and external factors influencing Airbus with the help of strategic tools likeSWOT and PESTLE
- Interpretation of Airbus’s USP or unique selling proposition, mission statement and vision statement that has set a benchmark in the aviation industry.
- SWOT/TWOS Analysis- comprisingof the detailed analysis of Airbus Strengths, Weaknesses, Opportunities and Threats
- Track strategic initiatives taken by Airbus, to stay ahead of its peers and competitors and attaincompetitive advantage
- Highlighting thekey competitors of Airbus, number of employees and its subsidiaries
- Intelligence on Airbus's share price, mergers and acquisitions, strategic partnerships and alliances, capital raising, and equity transactions
- PESTLE/ PESTEL/ STEEPL Analysis- covering in-depth analysis of all external factors namely, political, economic, social, technological, legal and environmental and highlighting their impact on the operation of Airbus
- Summarization of Airbus’s business model, along with further division and examination of key business segments and business case study
- A peek into the Airbus’s key performance indicators, success factors, value proposition and core competencies
References used in Airbus Analysis Report
Copyrights and Disclaimer
Airbus SWOT and PESTLE analysis has been conducted by Kanupriya Sheopuri and reviewed by senior analysts from Barakaat Consulting.