Airbus Decides to Permanently Land the A380 Airbus SE is Europe's largest aircraft manufacturer with revenues exceeding $71 billion in 2018. Boeing. the company's chief rival, dominated the long-haul market with its agship, double-decker 747 aircraft for decades. In 2005 Airbus unveiled its A380 aircraft with a range of 8.000 nautical miles to challenge Boeing's dominance of this important market. The four-engine A380 superjumbo is certied for up to 853 passengers, making it the world's largest passenger aircraft. We want you to consider how the decision-making process led Airbus in 2019 to cease production of the A380. Overall. the company expects to have sold 251 planes by the time it ceases production in 2021, well under its breakeven target.130 The decision to stop production also means a reduction of about 3,500 jobs, and CHANGING MARKET DEMANDS Airbus began development of the A380 in the 1990s. The manufacturer believed it had identified an opportunity: as air travel increased there would be a need for larger aircraft. Airports in hub cities, such as London, Tokyo, and New York, only had so much capacity. So a massive aircraft that could seat a large number of passengers seemed like an ideal solution. 132 The gigantic aircraft was a hit with airplane enthusiasts, but the industry was experiencing three unexpected changes. First, bilateral and multilateral agreements eased airport congestion. Traditionally, countries granted each other landing rights for a fixed number of flights per week to a fixed destination. Then came "Open Skies" agreements that provided unrestricted access to all airports. 133 These agreements facilitated the growth of secondary airports so passengers could take advantage of lower fare tickets. "The A380 was better suited to 1995, before air routes fragmented," said Richard Aboulafia, an aviation expert. 134 For example, London was no longer the premier destination in the UK with cities such as Manchester becoming hubs of their own. 135 Second, Airbus grossly misjudged future passenger preferences. The company's initial research in the 1990s focused on Boeing's 747, which offered fewer flights, but more capacity on each one. The A380 launched more than a decade after this research was conducted. Passenger preferences had actually switched to wanting more flight times by the time the A380 went into service. Business travelers needed flexibility for flight departures between popular destinations, and this often meant more flights with each not operating at full capacity.136 An airline strategist told Bloomberg that the A380 was "Too costly to fly anything but near full, and unusable on any less dense sectors."137 Finally, many airlines have turned to smaller, fuel-efficient aircraft, such as Boeing's 787 Dreamliner. "As smaller, more efficient planes flood the market . . . [it kills] the case for larger aircraft," according to the New York Times.138 The two-engine Dreamliner has a lightweight carbon fiber body with significantly less fuel cost than the A380. The Dreamliner is much smaller than the A380, but that works out just fine in an era where each flight consists of fewer passengers who demand flexibility in the number of flights available to them. 139THE PRODUCTION PROCESS Airbus had trouble delivering the first A380s on time and within budget because the manufacturer realized it had underestimated the complexity of wiring the aircraft and It used a multinational design team. Airbus is In fact a partnership between different European nations. This results in different designers. using different software, making group decisions on the design of aircraft. Muttinational representation at Airbus went all the way to the upper echelons of the company until 2006. In fact. the manufacturer was led by French and German co-CEOs throughout the development of the A380. The superjumbo, dubbed the \"Eighth Wonder of the World." represented all that was great about the European Union, including shared leadership.14 \"From its inception. the A380 was a grand European project,\" according to Broomberg.'41