Airbus Ppt

An Industrial perspective on Through-Life-Costing

November 2008

Estimating and Managing Through-Life-Costs

Presented by:

David [email protected]

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 2

Welcome

to the world of Airbus

a few facts

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 3

Passengers at heart. Airlines in mind.

Airbus’ achievements by the end of 2007 included

An annual turnover of €32.1 billion

A gross market share (units) of 51 %

Delivering 453 aircraft and selling 1,341 in 2007

Surpassing 8,000 aircraft ordered by 286 customers

Supporting 5,000 aircraft in service with 287 operators

Regularly achieving over 50% of large civil aircraft orders

and deliveries

Welcome to the world of Airbus

Data to end Dec 2007

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 4

Evolution of the Airbus family

a world of innovation

9,175 orders

300 customers

5,366 delivered to date

453 delivered in 2007

Evolution of the Airbus family

Data to end Sept 2008

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 5

European Roots with global outreach

a world of cultural diversity

1 global company

3 customer support centres

4 training centres

5 spares centres

9 engineering design centres

16 manufacturing sites

20 languages

24 hour customer support (365 days a year)50 flight simulators

more than 88 nationalities

160 offices

298 customers290 resident customer support managers

296 operators

More than 5,000 aircraft delivered

56,000 employees

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 6

Though Life Costs

Through life costs

If we can’t afford it don’t build it?

David Gore

Airbus UK, 2008

When we mean to build, we first survey the plot, then we draw the model; and when we see the figure of the house, then we must rate the cost of the erection; which if we find outweighs ability, what do we then but draw the model in fewer offices, or at least desist to build at all?

William Shakespeare

Henry IV, Part 2,1.iii, 1598

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 7

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 8

Through Life Cycle Costs, Why are they important ?

Environmental Impacts

Reductions in greenhouse gas emissions to prevent global warming

Reductions in Noise output

Airport congestion

Through life costs

Diminishing world resources

Fuel & commodity prices will only go up

Recycling & or disposal will become more important

Understanding the drivers for these is key

To enable Airbus to meet these challenges.

To enable Airbus to maintain its position.

Possibility that authorities will legislate to

achieve these, probably through

increased taxation.

Mitigating the Risk and realising the

opportunities associated with these will

become increasingly important.

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 9

Because our Customers are asking for it

easyJet has become the first airline to outline the environmental requirements that must be met by the next generation of short-haul super-clean aircraft; and unveiled its design of what such an aircraft could look like for operation by 2015.

Dubbed the “easyJet ecoJet”, the aircraft would need to be 25% quieter and would emit 50% less CO2 and 75% less NOx than today’s newest aircraft (the 737 and A320 families of aircraft).

Rear-Mounted ‘open rotor’ engines for short haul flying due to their efficiency

A lower design cruise speed to reduce drag and a shorter design range to reduce weight

Noise reductions to come from a gearbox between the engine and the open rotor blades

Airframe to be made of advanced materials such as carbon fibre

Key features include:

Through life costs

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 10

What does this mean ?

Evolution or Revolution: The history of Aircraft design has arguably been one of conservative evolution, however the problems addressed previously require a revolution.

Through life costs

The problem Airbus and other design professionals face is not so much a lack of ideas; ideas are historically what designers have been best at providing. The task facing designers today is in dealing with ‘limited resources’ in such a way that the optimum design is chosen.

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 11

Understanding the Challenges

Market Requirements

High productivity Low cost of operation Superior reliability / maintainability Comfort / health driven cabin design Low cost of acquisition

Environmental Pressures

Low noise Reduced emissions Low manufacturing impact

Integration in the System Airport congestion Good airport compatibility

Through life costs

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 12

What do we need to do.

We need to develop high levels of competence in the area of cost control and cost awareness, to enable our new design to meet these challenges, for example:-

Through life costs

Development costs and over runs effect Low cost of acquisition.

There may be restrictions on travel as resources run out, we need to address this now with our future designs, however these must be cost neutral.

We must be able to balance the benefits of a technology with respect to performance, against the cost to implement.

We must be able to balance the benefits of a technology with respect to operating cost, against the cost to implement.

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 13

Addressing the challenge – current initiatives

Airbus participating in the multi partner Integrated Wing project.

This programme is of particular importance as it addresses the step changes called for by the The Aerospace Innovation and Growth Team (AeIGT) and the Advisory Council for Aeronautics in Europe (ACARE), set up to form partnerships between Government, Industry and Academia, under the heading of working together to ensure the competitiveness of the UK Aerospace Industry over the next twenty years.

Airbus, Design to Cost Department collaborating with Queens University and QinetiQ:

To create an integrated “Life Cycle Costing” model that will allow project partners to evaluate the impact of technologies being evaluated in the project.

How: By creating a Knowledge Landscape that provides a Life Cycle cost modelling framework, where competing technologies can be evaluated.

Resulting in the capability to trade off performance improvements against cost, and enable informed judgements to be made.

Through life costs

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 14

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 15

Balance of Investments (illustration)

Active Health Monitoring

The use of smart sensors to predict the occurrence of an incident and reduce:

Unscheduled maintenance Increase utilisation

What cost would this technology bear:To maintain manufactures and airlines Internal Rate of Return?Without penalising the customer.

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 16

Active Health Monitoring (Set Baseline)

Illustration 3:Show the impact on unscheduled maintenance hours when active Health Monitoring is deployed, then find what manufacturing cost increase the implementation of this technology could stand.

Find the level of profit the manufacturer has to charge to achieve an IRR of 15%):

Set the cost paid by passenger to enable the airline to achieve an IRR of 15%:

Specify reliabilty improvement 0 %

Apply predicted reliability improvement:

Find manufacturing cost delta that must be achieved to enable the airline to achieve an IRR of 15% with this technology deployed.

Development cost delta 0.0000 %

Manufacturing cost delta 0.0000 %

Maintenance cost delta 0.0000 %

Original number of Missions 41175Current number of Missions 41175

Utilisation increase 0.0000 %

Ticket Price £68.50IRR (manufacturer) 15.0 %

IRR (airline) 15.0 %

Step 1

Apply

Step 3

Step 2

0

1000

2000

3000

4000

5000

6000

1 3 5 7 9 11 13 15 17 19 21 23

Utilisation

Maintenance

Steps 1 & 2 Set the Manufacturers profit & notional ticket price to return predetermined Internal Rates of Return for Manufacturer & Airline.

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 17

Active Health Monitoring (Set Technology)

Illustration 3:Show the impact on unscheduled maintenance hours when active Health Monitoring is deployed, then find what manufacturing cost increase the implementation of this technology could stand.

Find the level of profit the manufacturer has to charge to achieve an IRR of 15%):

Set the cost paid by passenger to enable the airline to achieve an IRR of 15%:

Specify reliabilty improvement 25 %

Apply predicted reliability improvement:

Find manufacturing cost delta that must be achieved to enable the airline to achieve an IRR of 15% with this technology deployed.

Development cost delta 2.4087 %

Manufacturing cost delta 3.0104 %

Maintenance cost delta -4.8131 %

Original number of Missions 41175Current number of Missions 42072

Utilisation increase 2.1785 %

Ticket Price £68.50IRR (manufacturer) 15.0 %

IRR (airline) 14.7 %

Step 1

Apply

Step 3

Step 2

0

1000

2000

3000

4000

5000

6000

1 3 5 7 9 11 13 15 17 19 21 23

Utilisation

Maintenance

The user may now specify and Apply a targeted improvement in reliability. It should be noted that as expected the number of missions has increased. However due to the cost increase to implement the Airlines IRR has reduced

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 18

Active Health Monitoring (Find Cost)

Illustration 3:Show the impact on unscheduled maintenance hours when active Health Monitoring is deployed, then find what manufacturing cost increase the implementation of this technology could stand.

Find the level of profit the manufacturer has to charge to achieve an IRR of 15%):

Set the cost paid by passenger to enable the airline to achieve an IRR of 15%:

Specify reliabilty improvement 25 %

Apply predicted reliability improvement:

Find manufacturing cost delta that must be achieved to enable the airline to achieve an IRR of 15% with this technology deployed.

Development cost delta 2.1723 %

Manufacturing cost delta 1.4999 %

Maintenance cost delta -4.8131 %

Original number of Missions 41175Current number of Missions 42072

Utilisation increase 2.1785 %

Ticket Price £68.50IRR (manufacturer) 14.9 %

IRR (airline) 15.0 %

Step 1

Apply

Step 3

Step 2

0

1000

2000

3000

4000

5000

6000

1 3 5 7 9 11 13 15 17 19 21 23

Utilisation

Maintenance

Step 3 The model is now used to find the cost increase that this technology will bear to recover the Airlines IRR

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 19

Future Initiatives & Conclusions

Airbus is leading the MDOW research and technology programme in collaboration with 15 leading British industrial and research companies to develop low-cost manufacturing methods that will enable high-volume wing manufacture for next generation aircraft.Future design processes will help reduce airline operating costs, airframe weight and maintenance.

The programme will build upon, develop and enhance current knowledge both in the materials and especially in enabling rapid and cost-effective manufacturing whilst maintaining their excellent weight performance and the eco-efficiency benefits these bring to the Through Life Cycle Model.

The Multi Disciplinary Optimised Wing (MDOW)

Through life costs

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 20

and finally

to bring the presentation to a close

a short video that I hope you will find of interest:

and finally finally

what was the weight of the wing on the crane ?

24.6 t

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 21

Thank you

for your attention

© A

IRB

US

S.A

.S.

All

right

s re

serv

ed.

Con

fiden

tial a

nd p

ropr

ieta

ry d

ocum

ent.

Page 22

© AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

This document and all information contained herein is the sole property of AIRBUS S.A.S.. No intellectual property rights are granted by the delivery of this document or the disclosure of its content. This document shall not be reproduced or disclosed to a third party without the express written consent of AIRBUS S.A.S. This document and its content shall not be used for any purpose other than that for which it is supplied.

The statements made herein do not constitute an offer. They are based on the mentioned assumptions and are expressed in good faith. Where the supporting grounds for these statements are not shown, AIRBUS S.A.S. will be pleased to explain the basis thereof.

AIRBUS, its logo, A300, A310, A318, A319, A320, A321, A330, A340, A350, A380, A400M are registered trademarks.