MCR007A Project Management Essay Report

MCR007A Project Management Essay

Assessment 2

Choose a renowned failed project from the List of Failed Projects file in the Week 6 section of the Course Moodle Page. Describe the selected project and analyse the losses incurred by the project. Examine the concrete reasons for the selected project’s failure and propose alternative solutions / recommendations which are underpinned by supporting evidence. Students will be expected to utilize project management theories throughout their assignment and include diagrams, tables, charts and graphs to illustrate their answers.

NOTE: This assessment must be in an essay format and approximately 2,500 words in length.

Assessment Format

• Introduction

• Background of the failed project (one failed project from the list of failed projects PDF file in the Week 6 section of the Course Moodle page). What are the underlying causes or reasons for undertaking the project?
Note: ALL students must obtain approval from the lecturer for their choice of failed project.

• Scope / Objectives of the failed project (design, purpose, resources, overall funding, overall timeline etc.).
• Planning / Execution of the failed project (WBS, work packages, timelines, deliverables, milestones, cost accounts, and roles and responsibilities).
• HOW the project failed (what makes you determine that the project was a failure? / What are or were the salient manifestations of the project’s failure?).
• WHY the project failed (discuss the reasons for the project’s failure).
• Recommendations (what could or should have been done to ensure the success of the failed project?).
• Conclusion.
• Bibliography.

Solution

Introduction 

The competitive action of the rival company determines the survival of the firm. There is dynamic competition between Airbus and Boeing in the aerospace industry. This also demonstrates the strategies and actions of the company as a responsive move over the competitor (Woo et al., 2021). MBA Assignment Expert A global pioneer in the aerospace industry is Airbus operating in the defence, commercial aircraft, helicopter and space sectors. They are the leader in designing, delivering and manufacturing aerospace products and services. It has the forefront of the aviation industry and is constantly involved in innovation and committed to serving the customers. One of the revolutionary stories in this space is the Airbus A380 which had a failed story and served this industry for 14 years. It is one of the largest commercial aircraft with a seating capacity of 853 passengers. It was the only commercial aircraft having two full decks with excellent engineering services. It started its first commercial service during the year 2007. However, the airbus A 380 faced a manufacturing haul which failed the aircraft. The life of the aircraft is low compared to other aircraft that can last for 50 years. One of the important reasons for its failure was its gigantic size and due to this reason, many airports had not selected this aircraft. Apart from its size many other factors also contributed to its failures such as inefficiency, rising prices of fuel and other such factors like the pandemic crisis.

This paper aims to discuss the background of the failed project Airbus A380 and evaluate the reason for undertaking the project. In addition, it is going to discuss the scope of the project and the planning of the failed project. Further, it is going to provide insight into how the project failed and analyse the reason for its failure. Finally, certain recommendations will also be provided and the implementation of those measures could have resulted in the success of the Airbus A380.

Background of the failed project 

Airbus A380 is one of the giant-sized aircraft manufactured by Airbus and has been a favourite for many customers although it shut down its operation in 2021 (Nelson, 2020). The project was announced in the year 1990 to overcome the challenges faced by using Boeing. The double-check aircraft with a seating capacity of 555 passengers is one of the most ambitious projects. It has a two-tier wide body and four engines (Olejniczak & Nowacki, 2019). It started its service in October 2007 with the expectation of removing the defects of the Boeing747. This was an innovative step towards meeting the challenges of the competitors which aims to dominate the aerospace industry. It aimed to provide comfort to the passengers and claimed to be fuel efficient aircraft with a lower noise level and reduced emission of CO2 and NOx gasses. 

The Airbus A380 has many features like a 50.68 cabin length and a huge capacity to carry passengers. Airbus has configured its design many times and finally settled on a double-check configuration because of its lighter structure. It aimed to reduce the operating cost by 15 to 20%. It also aimed to provide better comfort to passengers by providing wider space. Airbus has used advanced technology that has claimed to reduce 10 to 15% fuel burn and emission. To provide better comfort the feature of the aircraft also includes lesser noise. In addition to this, the advanced version of the Airbus includes two cockpits for the crew. Various models of Airbus A380 were planned and designed and the basic aircraft with 555 seating arrangements were finalised with a high gross weight was 800 with a longer range A380-800R was planned.
 

Figure 1: Airbus A380 3D model
(Source: Olejniczak & Nowacki, 2019)

Further, the future model stretched 656 seats and the final assembly took place in France with interior fitting in Germany. On 19th December 2000, the board had been reconstructed and 8.8 billion Europen dollars were approved for the project. On 23rd January 2002, the design was finalised. After various tests and changes finally, the first fight took place on its journey to Sydney from Singapore. The underlying cause of the restructuring and designing of the Airbus A380 was to provide a solution to experience a better travel journey from the Boeing aircraft. This aimed to increase efficiency and connectivity with better comfort and environmental efficiency.
 

Figure 2: Airbus A380
(Source: Nelson, 2020)

Scope of the failed project

Since the entry of this Airbus A380, it has conducted over 800000 flights and carried more than 300 million passengers. It claimed to provide unique experiences to its customers. Superior travel experiences can be availed by passengers from economy class to first-class passengers. It was the new aircraft program and claimed to bring revolution to the 21st-century of the aviation industry. Various features of the aircraft differentiate it from the other market competitors. It provides a double-check in a three-class configuration. It has a huge floor area which is 49% higher than the other available aircraft. In addition, it has 355 more seating arrangements in comparison to the Boeing aircraft. It allows more space for travellers and increases their comfort to a higher extent. It also allows specialised features like the bar, duty-free shops and gymnasium amenities to experience better comforts (Sun et al., 2020). Previously no aircraft has provided such amenities in any aircraft. 

The scope of the project was to provide increased comfort and better amenity experiences to the customers. The specification of the Airbus A380 includes a capacity of 13.2 kilograms with a travel range of 9500 miles. It also has 4 rolls of royal treat 900 engines with a cruising speed limited to 587 mph. Its length is 72.7 meters with a wingspan of 79.8m. The Forward Door size is 283m *173 cm and the Aft door size is 254 cm *173cm. In the year 2016, the development cost was estimated to be 25 billion dollars over 15 years. For initiating the project, the government of France, UK and Germany provided a loan of 3.5 billion euros and an advance which is refundable up to 5.9 Billion euros. The project took several years to plan and approve the design and then to initiate the project. Aircraft test designs are essential for the development of any aircraft (Jin, 2022). A huge amount has been spent on design testing and approval. However, after finalisation, the project took near about two years for total development and initiation.

Planning / Execution of the failed project

The planning and execution of such a huge project of Airbus A380 need a higher degree of estimation of risk and cost management. Different companies adopt different approaches to designing aircraft (Gu & He, 2019). Huge amounts of investment were made for providing better services to the passengers. The aircraft initiated its first flight in 2007 however the project failed due to many manufacturing flaws. It also took several years to design the project. Work breakdown structure is important for delivering any project as it will provide a better understanding of the project. work package includes operations, and products and the final product is the aircraft. 319 orders were won by Airbus A380 and the organisation took a step-by-step approach to complete the project.

The project was announced in the year 1990 to eliminate the defects experienced by the passengers of Boeing aircraft. The airbus company took initiative however the estimation and execution of the project needs a perfect watch of the cost accounting. Millions of dollars were invested to build the project and it was seen that in 2016 the listed price of A380 was 432.6 million dollars. The hourly rental rate was about 37150 US dollars per hour and 21 crew members were needed for the aircraft due to the huge size of the aircraft. It was more than double-sized jet planes and developing a giant-sized aircraft involve huge costs than other Boeing aircraft. In addition, the physical build-up of the Airbus A380 demands huge research and development work.

The aerospace industry has never experienced such an aircraft experience in terms of structure and size. Airbus A380 has been unique in its type and groundbreaking design. It was planned to launch in 2000 the estimation of the project cost was 9.5 billion European dollars however with modification the estimated amount increased and in 2006 the company ceased to publish the reported cost of the project. In 2016 the re-estimation revealed that 25 to 30 billion European dollars were invested. In February 2019 it was estimated that there have been some outstanding figures that are still to be recovered by countries like Germany.                 

Table 1: Gantt Chart

Failure of the Project

Airbus A380, the largest ever commercial aircraft, was in the market for 14 years. Though its first flight with Singapore Airlines in 2007 got great applause from different corners of the aviation business world, after just only 12 years of its production the aircraft was destined to doom. A380 was designed following the demands of the fast-growing Asia and Middle East markets which were more prone to board more passengers per flight. Therefore, A380 was designed to produce big aircraft with a range of over 8,000 nautical miles and with larger passenger facilities but Boeing’s 787 Dreamliner with its smaller nimbler seemed to be more successful in the market in comparison with A380 during the same period. Though the orders and deliveries for A380 seemed to be increased from 2000 to 2013, the orders started to flatten from 2014. Emirates cut the order by 39 planes in 2019, February and it marked the doom of Airbus’ failed project of the A380. In 2019, the total orders of A380 were 273 with 234 deliveries. It did not meet the company’s target to sell a total of 700 A380 models in that year. 

The A380 was designed to provide a luxurious experience of flying for its passengers. It had more than 500 sq m of floor space to be used for bars, beauty salons and duty-free shops for the passengers and this programme caused more than 25 billion dollars in expenses for the company. Despite such a huge investment, the programme proved to be a failed project after an initial surge in demand, especially from Dubai-based emirates. It costs a huge loss for the company’s project A380 as the demands dried up and the lavish project never turned out to be profitable for the company. A380 is gigantic in its structural forms and provides a large number of passenger seats which is another cause of the project’s failure. Many seats remain unfilled and it makes the project unprofitable. Since 2005, a total number of 57 firms cancelled their orders of A380 including Emirates, Lufthansa and Virgin Atlantic (Giridharan & Rakham, 2018). China South Airlines ran only five A380S while the number in Asian Airlines is 6, Air France is 10, British Airways 12 and Singapore Airlines only 24. The development cost for the model was around 29.7 billion dollars which was twice the original development cost. 

Reasons for Project’s failure 

The reasons behind the failure of A380 projects are - 

● Large capacity: One of the major reasons behind the Airbus A380 is the aviation world’s shifting demands towards smaller aircraft. This is proved by the fact that Boeing’s B787 got more popularity in the same period with its half capacity of passenger seats. Even Airbus’s other projects with smaller and more efficient capacities - A350 and A330 got more popular in the aviation market (Jean-Charles Maré, 2021). Smaller capacity did not put pressure on filling every seat in a single flight and it also caused lower costs and fewer losses for the competing projects of A380. Due to its gigantic structure, A380 could land at selected 140 ports only which have to renovate for A380.

● Fuel price: With its giant size, A380 faces diverse problems. Boeing 787 engines need 5400 litres of fuel for an hour of its travel whereas the A380 needs more than two times the fuel burns per hour (Woo et al., 2021). After the crisis in 2001, fuel prices started to rise consistently. It put pressure on the project’s profitability.

● Wrong predictions: Misalignment caused deterioration in the design of the A380 (Jafari Songhori & Nasiry, 2020). With the more acceptance of the hub-and-spoke models for aircraft, in the early 2000s, Airbus also predicted that the future of the aviation industry is going to be dominated by big long-haul airlines. This model refers to the strategy of flying smaller jets from a less popular airport to a hub airport and from there to another hub airport and finally to a less popular airport. Changing demands in the market, discarded this model very soon. So, Airbus A380 with hub-and-spoke model failed with time. 

● COVID-19: Due to the pandemic situation, the aviation industry faced a tough situation with a huge drop in the number of flights and passengers internationally. This situation more subtly raised the demand for smaller and more efficient flights for passengers. Therefore, A380 was not even on the list of customers' demands. 

● Luxurious amenities: The sheer size and luxurious facilities offered in A380 flights also played the main cause in raising ticket prices. It runs on a capacity of 320,000 liters of fuel with its four engines and costs 25 billion dollars for its development purposes. These overall expenses over such a giant project cause higher prices of tickets for the passengers. Even the project’s luxurious facilities of salons, beauty shops and bars with the aircraft, never turned out to be profitable for the company. Thus, from the very beginning, the project caused losses for the company. Only 20 carries of A380 flights across the global market show the sheer lack of demand for Airbus A380.  

Recommendations 

The Airbus A380 project is run by 39 companies in 16 different countries. Despite the long excitements and discussions over the launch of the largest commercial aircraft ever made, it failed within the short span of 14 years. Recommendations for reviving the project with successful initiatives in the global market are discussed here- 

● Strategic planning: Airbus plants in the UK produces some parts of the A380 project and import other parts of the aircraft from different production companies across the world. All the pre-assembled parts are transported to the final assembly house in Toulouse, France (Darja Steiner Petrovič, & Mandrino, 2021). This is a major challenge for the transportation management department of this project. It also causes delays in the delivery of the orders. Therefore, Airbus’s more strategic plans to produce aircraft parts should be more efficiently formulated for a successful venture of the project.

● Model Modification: According to FlightRadar. There are still 129 A380 flights in service and Korean Air and Asiana Airways merger are still interested to continue the service of larger passenger jets. The joint alliance of airlines is hoping to run A380 for more than 30 years without the outside forces of the airline industry. The company’s lightweight engine and higher strength-to-weight ratio can make the project successful (Pelin et al., 2020). The company needs to modify its engines and fuel consumption capacity for the long run-in future. 

Conclusion 

Conclusively it can be stated that Airbus A380 was a very fragile project from the very beginning. That is why the A380 only lived in the market for 14 years while another long-haul jet model Boeing 747 dominate the market for almost 50 years. Despite the great enthusiasm of the passengers and great applause from different aviation industries across the global market in the very initial stages of the A380’s journey, it faced different dramatically challenges in the market during its short lifespan of production. Though it was targeted to meet the demands of the market for larger aircraft with wider passenger seats in a single flight, the same reason was invested mostly in the reasons for the A380's early failure. During the Covid-19 pandemic situation, different airlines faced the toughest situation with restrictions on international flights. This situation most prominently discarded the acceptance of large passenger jets with more passenger seats by customers in different nations. In this scenario, smaller jets got popular. Even the rising price of fuel in the global market caused a huge loss for the A380 which burnt much more fuel in comparison with other passenger jets. Its models with larger structures and engines also shrank the opportunities for the company to land in different airports. The failure of this project has also been criticised for the company’s subsidies from the French and German Governments. Huge losses for the project’s developmental initiatives are also proof of the project’s failure.  

Bibliography

Cimmino, N., Ponnusamy, S. S., Garriga, A. G., & Mainini, L. (2020). A modelling and simulation framework for the integrated design of aircraft systems. Proceedings of the Institution of Mechanical Engineers, Part G: Journal of Aerospace Engineering, 234(10), 1648-1660. Retrieved from: https://www.eucass.eu/doi/EUCASS2017-271.pdf 

Darja Steiner Petrovič, & Mandrino, D. (2021). Surface stoichiometry and roughness of a degraded A380 alloy after casting, technical cleaning and packaging. Materials, 14(21), 6458. doi:https://doi.org/10.3390/ma14216458 

Giridharan, D., & Rakham, B. (2018, December). Experimental Analysis of Fibre Metal Laminates. In IOP Conference Series: Materials Science and Engineering (Vol. 455, No. 1, p. 012037). IOP Publishing. Retrieved from: https://arxiv.org/ftp/arxiv/papers/2101/2101.11104.pdf 

Gu, Y., & He, S. (2019). Target costing as a facilitating method for Aerospace product development. Int. J. Sci.: Basic Appl. Res.(IJSBAR), 44(2), 75-86. Retrieved from: https://core.ac.uk/download/pdf/249336637.pdf

Jean-Charles Maré. (2021). Review and analysis of the reasons delaying the entry into service of power-by-wire actuators for high-power safety-critical applications. Actuators, 10(9), 233. doi:https://doi.org/10.3390/act10090233 

Jin, R. (2022). Design of vehicular flight test simulation platform for a civil airplane. Journal of Physics: Conference Series, 2336(1), 012018. Retrieved from: https://doi.org/10.1088/1742-6596/2336/1/012018

Pelin, G., Pelin, C. E., Stefan, A., Petre, A., & Dragomirescu, A. (2020). Mechanical behavior of sandwich structure composites for helicopters. INCAS Bulletin, 12(4), 155-162. Retrieved from: https://bulletin.incas.ro/files/pelin-g_pelin-c-e_stefan_petre_dragomirescu__vol_1.pdf 

Sun, Y., Kuprikov, M. Y., & Kuznetsova, E. L. (2020). Effect of flight range on the dimension of the main aircraft. INCAS Bulletin, 12, 201-209. Retrieved from: https://bulletin.incas.ro/files/sun_kuprikov_kuznetsova_e-l__vol_12_special_issue.pdf

Woo, A., Park, B., Sung, H., Yong, H., & Chae, J. (2021). An analysis of the competitive actions of boeing and airbus in the aerospace industry based on the competitive dynamics model. Journal of Open Innovation : Technology, Market, and Complexity, 7(3), 192. doi:https://doi.org/10.3390/joitmc7030192