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Breakeven and Cutting Production Capacity - the Airbus 380

Jim Riley

13th July 2016

A great example here to use when teaching real-life breakeven analysis.

The Guardian reports how Airbus is responding to weaker demand for its flagship A380 passenger plane by cutting production capacity from 27 aircraft in 2015 to just 12 in 2018.

The article reports that Airbus' breakeven output for the A380 in 2015 was 27 planes. However, with a series of cost-reductions, the breakeven output has fallen to 20 aircraft.

However, there is no point overproducing A380's if demand is moving to other, smaller and more fuel-efficient models (which Airbus has in its product portfolio)/

Jim Riley

Jim co-founded tutor2u alongside his twin brother Geoff! Jim is a well-known Business writer and presenter as well as being one of the UK's leading educational technology entrepreneurs.

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