Flying the A-380The Case for Bigger Aircraft

MIT meets Lufthansa 2003

09 January, 2003 MIT meets Lufthansa, 2003

Agenda

• The Challenge• Key Issues and Concerns• A-380 Technical Requirements and Operating

Procedures• Consequences• Summary

09 January, 2003 MIT meets Lufthansa, 2003

What consequences will Entry-Into-Service of the A380 have for an airline in terms of net management?

The Challenge

09 January, 2003 MIT meets Lufthansa, 2003

Facts

Airbus A380

Length: 72.2m

Wing span: 79.8m

Height: 24.1m

Weight: 560000 kg

Passengers: 555

Boeing 747-400

Length: 70.7m

Wing span: 64.4m

Height: 19.4m

Weight: 396000 kg

Passengers: 390

09 January, 2003 MIT meets Lufthansa, 2003

Flight Scenario

Planning

Departure:-Check In

-Gates-Aircraft Servicing

Flight:-Seats

-Distance-Cabin

-Crew Requirements

Arrival: -Airside Capacity

-Alternatives Maint.

Contingency Planning

Delays Security Rerouting Evacuation

09 January, 2003 MIT meets Lufthansa, 2003

Network Planning

Challenges & Opportunities

• Production constraints– Limited airport infrastructure (primary & alternate)– Fleet size / aircraft rotation– Exchangeability of fleet– Maintenance facilities

• Market Constraints– Limited routes (frequency & high demand)– Competition in a limited market

09 January, 2003 MIT meets Lufthansa, 2003

• Strategic Considerations

– Slot efficiency– Improve airline image (launch customer)– Create a unique flying experience– Market development– Cost efficiency – reduce cost per seat

Network Planning

Challenges & Opportunities

09 January, 2003 MIT meets Lufthansa, 2003

Network Structure Options

• Point-to-point• Network-to-Network (around the world)• Hub-and-spoke• Charter / non-network flying

09 January, 2003 MIT meets Lufthansa, 2003

Network Structure Options

• Point-to-point• Network-to-Network (around the world)• Hub-and-spoke• Charter / non-network flying

09 January, 2003 MIT meets Lufthansa, 2003

Network-to-Network

• “Alliance Airline”– Service provider – supports alliance partners– Airlines are customers– Link between several airline networks

• Route structure– Worldwide backbone connecting hubs– Regional networks feed A380 service– Global rotation

09 January, 2003 MIT meets Lufthansa, 2003

Pros

• One worldwide Traffic Control Center• Higher utilization• Opportunity for minimum maintenance facilities• Use of existing service points (i.e. check-in)• Faster learning curve with A380 due to specialized

organization and dedicated staff• Risk sharing • Stronger position –

enhanced influence (clout)

09 January, 2003 MIT meets Lufthansa, 2003

Cons

• Traffic rights / government interferences• Labor issues• Separation of image - corporate image identity• Different service networks / Cultural issues• Need long-term commitments / contracts• Dependence on alliance airlines• Each alliance member must

adapt their existing network to eliminate redundancy

• Inflexible network – reconstruction problems

• Allocation of costs and revenue

09 January, 2003 MIT meets Lufthansa, 2003

Conclusion

• A380 brings a new dimension in terms of size, technology, infrastructure demands

• Market opportunities are limited• One airline may have difficulty operating the A380

efficiently alone • Alliance integration creates opportunities and reduces

risk

09 January, 2003 MIT meets Lufthansa, 2003

Thanks for your attention !