Will Airbus Give Up on the A380?

 Two strategic bets
When Boeing committed to the Dreamliner (AKA the B787), it made a very different strategic bet from Airbus which had made its own huge bet on the A380.  Both manufacturers forecast world traffic growth of near 5% per year over twenty years.  The demand for planes is a demand derived from air travel. Thus the straegic question:  How were the duopolists' customers–the world's airlines–going to meet a doubling of passenger miles/kilometers in less than two decades? 

Two different answers
Airbus decided they airlines would move more people through the key international hubs with a bigger jumbo jet that would increase those hubs' throughput capacity.  Their solution was the A380 which could both fly 8-10,000 nautical miles and hold up to 950 people. The massive size of the plane would also allow it to be marketed with a smaller seating capacity and hitherto undreamed of luxuries like an airborne gym, three cocktail lounges, and other amenities.

Boeing predicted that the world's airline would meet the growing demand with more point-to-point flights.  The Dreamliner would have a similar long range, but would hold only 250-350 passengers.  Boeing bet the airlines would try to attract their most lucrative customers with direct flights maximizing the time value of flying executives rather than the luxury that also required large numbers of the unwashed masses to meet load factors. Boeing also committed later than Airbus and may have gone to school on the European's putt.


With hindsight is there a winner?
So are the results in yet?  No, but there is preliminary evidence Boeing may have made the better bet.        
So far Airbus has failed to get a single new buyer this year.  And now in this video, Bloomberg's Benedikt Kammel suggests Airbus's might discontinue its A380 superjumbo as soon as 2018.  

Has Airbus misjudged the market? 


(Source: Bloomberg, Dec. 11)

Kansas Taxes Gasoline More than Missouri, Colorodo, or Oklahoma

The American Petroleum Institute provides a map showing how much tax there is on gasoline by state:

Exxon-Mobil notes its profit per gallon is 5.5 cents.

Mike Lynch Strikes Back & Watch Out for Carly

Who needs the supermarket tabloids?

Hewlett-Packard went from being the only adult in Silicon Valley to its soap opera. Carly Fiorina put together the corporate powerhouse which could provide one stop shopping for Corporate America and provide every CIO a safe route to an ROI on their big bets. HP made a big mistake firing her, but still coasted on her strategy while going through a revolving door of CEOs. Disastrously they bought the British software company, Autonomy. This led to an $8.8 billion write-down and allegations of accounting fraud. Now Autonomy's founder Mike Lynch plans to report HP to the SEC for "false representations to the market." In this FT video (4:46 minutes), Murad Ahmed, European technology correspondent, leads Ravi Mattu through the whole affair.




The story just got more interesting!

And just when you thought Hillary Clinton would become the first female president of the United States, a real executive is hiring key people to make a run.  Tim Alberta writes in the National Journal, "Carly Fiorina is laying the groundwork for what one ally says is an 'imminent' presidential campaign—one that could launch as early as next month."

Hmm, does actual executive competence disqualify one for President?  Time will tell. 

Will Netflix Make Movies Now?

The media mogul, Rupert Murdock's mantra is "Content is King." NetFlix seems to have taken that to heart with series like "House of Cards" and now with its "Marco Polo" and "Crouching Tigers, Hidden Dragon 2." NetFlix chief content officer Ted Sarandos tells Matt Garrahan, the FT's Global Media Editor, talks about the video streaming service's plans and reasoning in this Dec 3rd, 2014 video (4:56 minutes.) 








The movie industry's business model has been evolving rapidly driven by the digital technology revolution.