why projects fail case study of airbus a380

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What Went Wrong With The Airbus A380?

The last Airbus A380 ever produced is slated to be handed over to Emirates imminently. The delivery will close one of the most spectacular chapters in European aerospace history.

It was spectacular in many ways: The A380 was the largest commercial aircraft ever produced, intended to eclipse Boeing ’s 747; passengers and pilots loved its comfort and ease of flying, even if airline finance departments were less enamored with it. The aircraft’s production run, spanning just 14 years, was drama-filled, including the expensive redesign of its wings and increasingly desperate campaigns to sell more of the giant aircraft and extend its life. They were full of negotiations about even larger versions and Neos, after the reengining concept had worked so well for the A320 family.

But after Emirates finally pulled the plug on a large follow-up order that would have saved the program in the winter of 2018, it was up to departing Airbus CEO Tom Enders to finally decide the ending for the A380. It had become clear that Airbus would never recover the €25 billon ($30 billion) or so in research and development costs sunk into the program over the years. And with no new orders keeping production open even at minimal rates, it became unsustainable. Europe’s most ambitious commercial aircraft program post-Concorde had become a gigantic failure and a prime example of management reading the market improperly. 

Was it a misreading, though? Was there ever a chance of it continuing until demand recovery?

In the weeks before that final delivery, Aviation Week ShowNews spoke with many insiders who shared their views and memories. Among them were Enders and former Airbus sales chief John Leahy as well as Nico Buchholz, himself a former Airbus sales executive who later ordered the aircraft for Lufthansa as its head of fleet strategy. Some still think the program could have been rescued. But the look back into its history also shows that industry doubts about the A380’s viability had begun even before first delivery.

Paradigm Shift

Enders was head of strategy at Airbus’ German shareholder DASA in the 1990s—the manufacturer was still a loose economic interest group (French acronym GIE), a consortium of shareholders that was nowhere near being integrated. Much later, of course, the A380 was the key factor in fundamentally changing that. In the 1990s, discussions about the risks and opportunities of building an A3XX were intensifying after years of studies. “Airbus did not stumble into [building] the A380; we were very aware of the project’s risks,” Enders says. “But then, technology and the market changed faster than everyone had thought.”

In hindsight, the writing may have been on the wall for the A380 even before its own entry into service—even as early as four years before. In December 2003, Boeing decided to launch the 787, a revolutionary aircraft in many ways, particularly in its use of lightweight composites for structural weight savings. By contrast, “Airbus’ achievement in the A380 was mainly to be able to build something that big,” says Buchholz. Other than that, the A380 was structurally fairly conventional.

Of equal importance was engine manufacturers’ commitment to build powerplants for the Boeing 787 that were significantly better than those of the A380.

The consequences were fundamental: Suddenly, the paradigm of building larger aircraft to cut unit costs was broken. The unit costs of 787—and later the A350—were comparable to or even better than those of the much larger A380, but with a considerably lower risk of not being able to fill the aircraft. Unit revenues were the other side of the coin: There was greater pressure on yields, with literally hundreds of additional seats to fill on every flight. Once Lufthansa started flying the A380 across the Atlantic, the airline found that the yield on its Frankfurt-New York route fell by almost as much as unit costs.

Looking back, Leahy has harsh words for Rolls-Royce and GE Aviation. “Airbus was blindsided by the engine manufacturers in 2000, when we were getting ready to launch it,” he says. “Our program people had assurances [from] the engine OEMs that there was nothing on the horizon with better specific fuel consumption [SFC] for years to come. And three years later, when we had not even delivered the first aircraft, GE and  Rolls had engines with 15% better SFCs that they were bringing out for the 787. That left Airbus at a commercial disadvantage that was very unfortunate.”

The aircraft’s most important customer, Emirates Airline President Tim Clark, agrees to an extent. “I regret that it was not reengined, that the weight was not taken out,” he says. However, he also points to the many problems the A350and the 787 have had since the market introductions of the next generation of engines, issues the A380 has not faced to the same degree. He asks whether the A380 may have had the same reliability issues, which are hard enough to handle on a 150-seat narrowbody but could require large sums for passenger compensation and handling for just one canceled A380 flight. The tradeoff between efficiency and reliability was a big consideration.

When Airbus decided to launch the A380, it was still chasing another idea, and therefore the wrong target. “In the 1990s, not only Airbus but also many airlines were still very focused on four engines when it came to widebodies,” Enders recalls. And Airbus thought it had to build an aircraft that would compete with the 747 and break into the Boeing monopoly on very large jets. In 2015, in the midst of increasingly desperate struggles to find new customers, then-CEO Fabrice Bregier conceded that the A380 had been launched “at least 10 years too soon.”

Perhaps it was not launched too soon but too late: In 1990, Boeing received orders for 122 747-400s and delivered 70. Ten years later, when Airbuscommitted to building the A380, 747 orders were down to 26 and deliveries to 25. And with few exceptions since, 747 production has continuously declined.

Airbus’ growing problem was not just the 787, or later its own A350, which further deepened the market shift. In April 2004, it was none other than Air France, in Airbus’ backyard, that took delivery of the first two Boeing 777-300ERs. That aircraft, and not the A380, replaced the 747 as the reference on long-haul trunk routes before slowly being superseded by even more efficient twins.

“We all have misjudged the future of the twins, and that led to the efficiency problem of the A380,” Enders says. “I only admit this reluctantly, but Boeinghas largely been right with its point-to-point argument.” He is referencing the idea that passengers, when having the choice, prefer nonstop flights over hub connections. Both Leahy and Clark disagree with the idea that the hub concept has weakened. “I don’t share the view that the days of the superhub are over at all,” Clark says.

Missed Opportunities

The two-year phase from 2005 to 2007 was crucial to the A380’s early demise, not only because of the growing threat from more efficient twins. In those years, billions of euros in extra costs were added to the program, and important decisions that could have been made were not. 

The aircraft had performed its first flight at the end of April 2005, a milestone for the entire aviation industry. Airbus garnered applause from around the world for the achievement. But a little over a month later, the company was forced to announce the first (six-month) delay in the program. As it turned out, different parts of the consortium had used different versions of the CATIA design software and, infamously, as a result many of the cables inside the fuselage were too short.

An almost incomprehensible struggle followed. Airbus threw literally thousands of technicians and engineers at the problem. Many in charge burned out—and many left, but those who stayed learned tough lessons that were incredibly valuable for their later careers. Airbus had to announce two more delays before finally regaining control of the situation toward the end of 2006.

The crisis was so deep that management considered the most radical moves. “We asked ourselves whether we should terminate the program,” Enders reveals. “But that would not have been right back then. Development was very far advanced, and the reputational damage would have been huge.”

There were still consequences. EADS had been formed in 2000 along with the launch of the A380. The former Airbus GIE was converted into a real company a year later. But in 2006, EADS acquired the remaining 20% in Airbus SAS previously held by BAE Systems and proceeded with much deeper integration. “We pushed through relatively brutal integration in 2006-07,” Enders says. “Before that there had been a lot of talk about it but no real action.”

Airlines had their own perspective, which changed substantially between the 2000 launch and entry into service seven years later. “In 2000, you could not predict what crystallized in 2005—that the aircraft was technically outdated,” says Buchholz, who ordered the A380s for Lufthansa. After all, the aircraft’s unit costs were advertised to be 13% better than those of the 747-400. But then things started to move. 

Japan opened up Tokyo Haneda Airport for international flights, weakening the argument that the A380 was needed for slot-constrained Narita International Airport. China built new international airports at a record pace and encouraged long-haul service to them. “You could get a feeling that the A380 was going to be too large,” remembers Buchholz. “But you could not really prove it.”

Buchholz contends that it might have been possible to rescue the A380, but it would have required early, decisive and painful action. When the program was delayed bya cabin installation disaster, Airbus should have used the opportunity to modernize the aircraft with a better engine based on ongoing development programs for the 787 and later the A350. “With a better engine, the A380 would have had a longer life,” he says.

“With new engines, it would have been an unbeatable aircraft in the marketplace,” Leahy asserts. “We came close to pulling it off. Had we had the right engines, we would probably have rewritten history.”

But he does not think Buchholz’s idea of pushing for an early reengining then would have been possible. “There were commitments made; the engines were being developed. It would have pushed back the thing a couple of years, [and] there would have been big fights with the engine manufacturers. They had invested a lot of money into that generation of engines.”

On Oct. 15, 2007, Airbus finally delivered the first A380 to Singapore Airlines. A little over a week later, the aircraft flew its first commercial service from Singapore to Sydney. It was a major milestone that, Airbus hoped, would pave the way for a less eventful future and a ramp-up of production to 45 aircraft a year, a rate of just under four aircraft per month. Of course, Airbus never reached rate 45. Production peaked at 30 aircraft in both 2012 and 2014. The last relatively big year for the type was 2016, when Airbus again managed to deliver 28. However, the turning point that likely sealed the aircraft’s fate also occurred in 2016 and led to the end of production five years later. 

Weighty Issues

The nine years between 2007 and 2016 continued to be drama-filled. Emirates, by far the type’s most important and loyal operator, had just taken delivery of its first aircraft in early 2008 when the U.S. subprime and global financial crisis unfolded and heavily affected demand for international air travel. Airbus delivered 12 A380s in 2008 and only 10 a year later, a step in the wrong direction. It was not able to expand production in a significant manner until 2010, when it decided to shelve plans for the A380-900 in light of  the huge financial burdens accumulated and development work on the A350, A320neoand A400M. 

The stretched A380 version was what the Airbus designers really had in mind when they built a wing much larger than necessary for the baseline A380-800. It made that version heavier and so significantly less efficient than would have been possible with a smaller wing optimized for its fuselage size. “The [A380-800] was not the aircraft that we actually wanted to build,” Enders says.

“The design was optimized for larger variants,” Buchholz says. Airlines knew that, of course. But some, like Lufthansa, decided right from the beginning that the -900 would have been too large. The problem with the -800—“you can’t send the upper deck somewhere else when a route does not perform as planned,” as Bucholz puts it—would only have become worse with a larger aircraft, he says. The lack of flexibility was frightening airline planners.

On the other hand, Emirates was foremost of a number of airlines that were very much in favor of the -900. They pointed out that the larger version would be much more efficient and could reinstate the unit-cost advantage over smaller long-haul aircraft, including the A350 and 787. They also saw a market for it on their busiest routes. “We wanted the -900, not the -800,” Clark says. “The aircraft would have had another 120 seats. But when the idea was discussed, there was a slowing down in appetite [at other airlines]. We did not share [their] view.”

The real problem with the A380-900 plan was not that the stretch was never built, it was that it made the -800 a much worse version. “The fact that from the very beginning they built weight into the airplane so they could do the -900 was a program mistake,” Leahy points out. “You just don’t build extra weight into the airplane so you can stretch it. You optimize the aircraft, and then you figure out how to stretch it by taking some of the margin that you did not need. When you build in the capacity for another 100 seats from Day 1, you are going to build a heavy airplane.”

Clark says it still worked well for Emirates. “In the years after the financial crisis, 80% of our profits came from the A380,” he notes. “The A380 is still a hugely efficient aircraft, even though it has old-technology engines.” According to his calculations, a two-class A380 has 4% lower fuel burn per seat than a 787-9 at equivalent space allocation, which would mean putting 670 seats onto the aircraft. Emirates’ two-class A380s currently have 617 seats.

The airline went above and beyond anyone else in the industry to make the aircraft the core of its brand. “It was a wonderful, exciting challenge to deal with this enormous amount of space,” Clark remembers somewhat wistfully. “We put in the bars and the showers. We created a Ritz Carlton.”

But that Ritz Carlton was hugely complex to build. “The showers caused a lot of issues,” Clark says. Pumping hot water up to the upper deck with sufficient pressure was just one of them.  

‘ A Brick Wall’

One of the biggest misunderstandings in the history of the A380 was its true market potential in China. “If small Dubai can take more than 100 aircraft, we should be able to place a lot more of them into China,” a senior Airbusexecutive recalls thinking. But in the entire production run of the aircraft, only five were actually delivered to a Chinese airline, China Southern, the first of which arrived in October 2011. So why did China not work out?

When Airbus tried to sell the A380 to the nation’s big three—Air China, China Eastern and China Southern—some factors worked against them. Given their relatively poor reputation for customer service and product quality, the carriers lacked confidence that they could compete with their U.S. and European rivals on long-haul routes, let alone with an aircraft that big.

Long-haul flying was also a much smaller part of their business at the time, as opposed to the late 2010s. Being very conservative, the Chinese airlines also disliked launching a new aircraft, or even taking delivery of one, until performance was proven well after market introduction. The odds for Chinese business were always much lower than some in Toulouse had imagined.

“The obvious target [for A380s] should have been Air China,” says one insider. Of the three airlines, it was the one with a base in the country’s capital, and in many ways it was perceived as the flag carrier. But, unfortunately, the airline always had been close to Boeing and ended up being one of the few carriers around the world that ordered the 747-8.

For Leahy, the case is clear. “There was an enormous amount of politics involved in this from the U.S. and Boeing ,” he says. “There was a lot of pressure on Beijing to not go with the airplane and stay with the 747. There was a lot of ingrained inertia with the old team in Beijing. That’s where we hit a brick wall.”

Some China experts believe it was still possible at some stage to have placed the A380 with Air China. “If Cathay Pacific had gone for the A380, Air Chinawould have followed,” says a source with knowledge of past talks.“ Cathay certainly would have helped,” Leahy agrees. 

Although the carrier’s former CEO Tony Tyler has always been skeptical about the aircraft, Cathay was nonetheless close to an order at various points, particularly in 2010. One time, according to an insider, a deal failed only because Toulouse was not willing to accept some last-minute concessions demanded by the airline.The Hong Kong-based carrier was perceived as a role model for strategy, fleet and product quality by Air China, which has since also become a big shareholder. But Cathay did not jump.

The only order for the A380 ever placed by a Chinese carrier also played a role, notes one executive. “You could argue that selling to China Southern was a mistake,” he says. “It really enraged Air China, because they viewed themselves as the flag carrier. There was also a lot of personal rivalry between the CEOs, and when China Southern went for [the A380], Air China had to show it was the wrong move.”

A fleet of just five aircraft was also suboptimal and a compromise that did not work, particularly from China Southern’s main base in Guangzhou. The airline always planned to base the aircraft at Beijing but was not allowed to deploy them on routes from Air China’s hub. The two carriers tried to negotiate a joint A380 operation but in the end could not come to an agreement.

At one point, Hong Kong Airlines placed an order for 10 A380s, but insiders say the commitment was “never very credible.”

Had Airbus succeeded in breaking into the Chinese market, would it really have been literally with hundreds of aircraft, as some hoped? One executive with deep knowledge of the situation says Air China could have taken no more than 15 A380s and China Eastern and China Southern possibly 10 each. Even if the Hong Kong Airlines deal had gone through, only about 50 aircraft across all Chinese and Hong Kong-based airlines seemed feasible, the executive says. “Two-hundred was never going to be realistic,” he asserts.

In the meantime, the A380 went through its first safety and second industrial crisis. On Nov. 4, 2010, Qantas Flight 32 (QF32), an A380 registered VH-OQA, took off from Singapore Changi Airport bound for Sydney, just like the type’s first commercial flight three years earlier. But this time, the flight did not go smoothly. VH-OQA suffered an uncontained failure of engine No. 2, a Rolls-Royce Trent 900, 4 min. after takeoff, causing extensive damage to the airframe, wings, tanks and one hydraulic system. Two other engines continued to operate, but only in degraded mode.

QF32 landed back in Singapore and no one was hurt, but both Qantas and Singapore Airlines temporarily grounded their A380 fleets. According to a 2011 preliminary report by the Australian Transport Safety Board, 55 Trent 900 engines had to be replaced across the world fleet.

As dramatic as the incident was, the type’s most serious since commercial service had begun also demonstrated the resilency of the aircraft—and the flight’s crew. Redundancy had paid off.

VH-OQA was repaired in Singapore and returned to Australia in April 2012. During the repairs, tiny cracks in the wings were discovered. They turned out to be the start of the next industrial crisis: Airbus had to strengthen certain areas of the wings for in-service aircraft and use a new aluminum alloy for some parts going forward. The problem was eventually fixed, and it is not among the main causes of the premature end of production. But it made the program’s economics even worse. It was becoming increasingly clear that Airbus would never make a profit on the A380.

The Last Stand

But the airframer was still a long way from giving up. About a year after the European Union Aviation Safety Agency (EASA) had made mandatory checks for wing cracks, Airbus delivered the 100th A380 to Malaysia Airlines. With the industry now fully out of the global financial crisis, the air transport sector entered an unprecedented period of strong growth, helped by expanding global trade, low interest rates and—for the most part--—relatively low fuel prices. Those in charge in Toulouse were still hopeful the A380 could benefit and somehow turn the corner.

In November 2013, Emirates gave the program another boost: With 39 of the aircraft in service and another 51 on firm order, the airline bought 50 more at the Dubai Airshow. The three big Gulf carriers were peaking—they also placed massive commitments for the new Boeing 777X at the time. The Emirates deal was for the existing aircraft, but the A380neo concept was also discussed. After all, Airbus had launched the A320neo in 2010 and had received much better market feedback than expected.

A year after that Dubai Airshow, Airbus’ then-CEO Fabrice Bregier said the company would “one day” launch an A380neo and a stretch—and the bigger aircraft would get new engines. Six months later, he talked about an A380neo that would enter service around 2020. But in June 2016, Clark announced that the talks about an A380neo had “lapsed.”

“It was becoming apparent that we weren’t getting a customer on board for a Neo or a stretch,” Leahy says. “They were looking at some strong commitments from the engine manufacturers, as well as Airbus, about what the capability was going to be of a reengined airplane.”

Potential customers did not get what they wanted. Only one month later, in July 2016, Airbus made a U-turn by announcing a massive production cut from 28 aircraft that year to just 12 in 2018. The company was trying to buy time, as well as looking for alternatives. 

In June 2017, Airbus presented the A380plus concept—the same airframe as before but with a more efficient cabin, around 80 more seats. Space was going to be made available, among other ways, by eliminating the rear staircase that was taking up a lot of room. But, again, customer response was lukewarm. Notably, Emirates did not like the idea since the A380’s luxury—the first-class shower and the bar at the back of the upper deck—had become part of its iconic brand.

Emirates stuck with the aircraft nonetheless. With the A380 deep in crisis mode and questions about its viability (and residual value) swirling, the airline agreed to buy another 36 aircraft at the beginning of 2018. The decision was preceded by months of tense negotiations with both Airbus and Rolls-Royce. The Engine Alliance of General Electric and Pratt & Whitney had long lost interest in further A380 business.

The deal, Airbus hoped, would enable it to sustain production at low but justifiable levels long enough for demand from other airlines to kick in eventually. It was also Leahy’s last marquee deal, a final exclamation point at the end of a very successful decades-spanning career as an aircraft salesman. Almost exactly one year after Leahy returned from the contract talks in Dubai, though, Enders pulled the plug on the project, announcing that production would cease in 2022, a date that would later be pulled forward to November 2021.

When Enders decided to end the program, Leahy had already retired, and the CEO had also announced his own departure. “Tom was leaving the company. He felt the A380 was not selling well, and he wanted to clear the deck for the new team and shut down the program,” the former sales chief says. “That is just the way Tom is.”

Leahy saw things differently. “I fully expected the A380 program to continue with Emirates’ support after I retired,” he says. “I left around February, handed over to a new commercial director and expected to have that deal finalized.” 

So why didn’t that happen? “I never really managed to get to the bottom of why they were not able to do it,” he says. “I think it was a combination of Airbus and Rolls-Royce factors. Emirates still wanted to do the deal. I still believe it to this day.”

The case may be more nuanced. Clark remembers that Emirates was going through another round of fleet strategy planning in late 2018 and was coming to the conclusion that a fleet of 120 A380s was going to be “optimal.” At least a large part of that fleet is to be flown “well into the 2030s,” Clark notes. 

However, in the end, even Emirates found that it did not want more of the aircraft and instead decided that a supplemental fleet of smaller A350s and 787-9s made more sense.

Based in Frankfurt, Germany, Jens is executive editor and leads Aviation Week Network’s global team of journalists covering commercial aviation.

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Failed Project Series - What Went Wrong with the A380?

Project Profitability , Failed Project Series

This post is part of a series of posts on some of the most prominent failed projects and how you can avoid the same pitfalls.

At a cost of over US $6 billion, the Airbus A380 fiasco was extraordinarily expensive considering that its cause was the simple reality of a failure of communication. 

Noble Intent Based on an Optimistic Perspective

Since the beginning of the European Union in 1957 (which was called the European Economic Community - EEC or EC - until 1993), the many separate countries have worked to unify their activities for the good of the continent as a whole.

The Airbus aircraft company was one of the first significant attempts at collectivizing international efforts under a single industrial umbrella. In 1967, to "strengthen European cooperation in the field of aviation technology," political leaders from Germany, France, and Britain agreed to participate in the development of an "airbus" that would revolutionize transportation on their continent and around the world.

The international "consortia" also eventually added leaders from both Holland and Spain and had as its goal to be the primary competitor to America's burgeoning airliner industry. Their first project: the A300.  

Accessing the Assets of Each

Philosophically, the project offered a virtually unlimited palette of resources from each of the participating countries. The efforts of high industrial achievers in one country, when combined with exceptional contributions from the other countries would, of course, result in unmatched quality and service in any industry they tackled together.

By 1968, each contributing country had identified its experts as leaders for the company and had developed a workshare program that identified who would do what, when, and (most notably) where:

• The French would produce the cockpit, control systems, and the lower center section of the fuselage;
• the British would make the wings;
• the Germans would tackle the rear and forward fuselage sections;
• the Dutch would make the moving parts, such as wing flaps and spoilers, and
• the Spanish were in charge of the horizontal tailplane.

German engineer Felix Kracht was responsible for making "all the pieces come together," regardless of the related flag or language of the separate manufacturers.

Organizationally, the group formed the "Groupe d'Interet Economique" (GIE) under French law with the plan being that each country would have a voice at the top level of the company while maintaining separate business entities within the separate jurisdictions.

Remarkably, from the 1970's through to the 2000's, Airbus built on its original A300 framework, adding innovations and improvements as the industry evolved. By 2004, the company had reorganized into a newly "integrated" company, "Airbus Societe par Actions Simplifee," and established a series of "centers of excellence" at its varied manufacturing sites located around the world, while maintaining its “leadership” board of Directors in France.

Its A380 project, which began in 2000, became a "truly global program" which involved as many as 1,000 companies worldwide. With an anticipated release date of 2002, the company accepted over 50 A380 orders from buyers all over the world. When, by summer 2006, those orders were still not filled, those customers demanded to know what was causing the delays. It turned out to be a culture of miscommunication and territorial divides.

Reorganization Failed to Address the Cultural Problem

The fundamental challenge with Airbus was its broad international straddle, which hampered communications and injected politics and territoriality into corporate actions and decisions. While the company's reorganization had brought leadership into a single location, it did not also relocate management into a single team. Instead, individual teams, located in separate countries and speaking different languages, did not communicate with each other about what they were doing or, more importantly, the changes they had made to plans, methodologies, and schematics.

Consequently, in Germany, engineers used a legacy version of CATIA (a design software program) to develop the miles of wiring for the wings. In France, however, engineers used the updated version of the same software to create the wing structures. The two versions were not compatible with each other. As a result, the German-manufactured wiring did not fit into the French-manufactured wing configuration , and both elements required a complete overhaul before the wings operated correctly.

In all, that single (although monumental) glitch cost the company over US $6 billion to repair and set back production by another two years. Airbus wasn't able to deliver its first A380 to its first customer, Singapore Airlines, until October 2007.

Related - A Lesson in Project Failure

Why was Sydney's National Opera House delivered nearly $100 million over budget and ten years later than expected?

Experts Identify Project Issues

Industry analysts identified several elements that contributed to the debacle:

• A convoluted management structure riddled with managers loyal to national constituents, not to the international conglomerate, slowed decision making (Wall Street Journal, July 9, 2007);
• The "surprisingly Balkanized organizational structure" (Business Week Online, October 5, 2006);
• Unresolved internal disputes (The Economist, January 13, 2007).

In the end, and in consideration of other failures of the company to meet customer expectations, the fundamental challenge presented by the A380 was the fundamentally flawed culture of a company that lacked a single vision and a shared set of values and beliefs. Without a doubt, Airbus enjoyed access to the world's most evolved and innovative aeronautical and aviation experts, but even that couldn't save this project from the squabbling and divisions that occurred across multiple corporate and national borders.

Today, Airbus remains Europe's top airline manufacturer. It survived the A380 disaster because its smaller, less ostentatious planes continued to satisfy customers, and because it revamped its A380 production processes to avoid further delays. In total, Airbus has delivered 215 A380s to customers around the globe. It seems to have learned the two fundamental rules of project management that were so woefully missing prior to the A380 disaster:

• Insist on a single system of truth across all project elements, and
• Insist on communication and collaboration across all project sectors.

For additional information on Beyond Software please contact:

Nicole Holliday [email protected] 866-510-7839

Topics: Project Profitability , Failed Project Series

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Will Bedingfield

Why did the Airbus A380 fail?

The rapid demise of the Airbus A380 is a complex tale of missed connections, a changing market and, ultimately, a staggering lack of demand for the largest commercial airplane ever built. And, as a result, this giant of the skies could well be the last of its kind.

The decision to stop production on the A380 came after Emirates, which operates more than half of all flights using the plane, halved its latest order. After being in production for a little over 12 years, the A380 will go down as one of the shortest-lived models in aviation history. But why did it fail?

To understand that, you first need to understand how Airbus hoped it would succeed. The thought process behind the aircraft’s design – specifically, its size – had two major threads. The first, argues John Grant, director of JG Aviation Consultants, was “a strategic desire to distance themselves from being just another Boeing.” (Boeing had released a smaller aircraft, the 787 Dreamliner, at the same time back in 2007). To an extent, that worked. So far so good.

The second problem was a gamble on the future of the market. “It was designed to solve an expected problem”, says Keith Mason, Professor of Air Transport Management at Cranfield University, who assessed Boeing and Airbus’s differences in philosophy back in 2007. Airbus’s logic here was simple: if the industry continued to grow at the expected rate – Mason says passenger numbers typically double every 15 years – then airports would be overwhelmed by the sheer number of people. A large plane, so the argument went, would help ease this bottleneck by picking up more people per flight while also maximising value for pricey landing slots. This prediction proved to be wrong. “Airport congestion hasn’t happened,” says Mason. In fact, airport capacity in many markets, especially Asia, has grown.

The A380’s failure is also a result of a switch in the aviation world towards smaller, more efficient aircraft. Boeing’s B787, for example, seats around half as many passengers as the A380. In fact, Emirates, as it cut back on the A380, placed a large order of Airbus’s own saller A350 and A330. Grant points out that these aircraft offer “better operating economics, lower costs, smaller capacity and therefore less pressure to fill every seat”.

The sheer size and luxury of the A380 also played a role in its undoing. The plane, which is estimated to have cost $25bn (£19.4bn) to develop, runs on a capacity of 320,000 litres of fuel, packs four 70,000lb thrust engines, carries 555 passengers over two decks and 500 square meters of floor space, and has a duty free shop, bar restaurant and beauty salon.

By Joseph Cox

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By Hannah Zeavin

Mason points out that while this type of “hotel in sky” superjumbo was seen as a technological marvel at the time, “it is now considered an overly expensive aircraft, with four engines that are less efficient than newer engines found on late model, twin-engined aircraft.” He also explains that filling an aircraft with more than 500 seats demands selling at least some of the tickets at low prices. Overall yield is therefore lower than a smaller aircraft, which are easier to fill up. “Airlines have been nervous to commit to very large aircraft”, says Mason. “They often cannot find a sufficient number of suitable routes where demand is high enough to fill the aircraft at a decent yield.”

Airbus was correct in one prediction. It envisaged that flights would continue to be hub-to-hub, involving passenger transfers in major airports. (Think of a flight from Europe to Japan, for example, that requires a stopover in Dubai.) Boeing, in contrast, positioned its 787 as a hub-bypass, made for direct “point-to-point” flights. Here, it's Airbus that has been proven correct. As a Centre for Aviation study puts it, “hubs dominate, yet most airlines prefer medium/large aircraft and not the very large aircraft category, consisting of A380s and 747-8s.” In Boeing’s case, figures show that in 2016 a whopping 73 per cent of 787 flights were made between hubs. Yet, for the reason Mason outlines, this has not been enough to save the A380.

In fact, the sheer lack of demand for the A380 is astonishing, says Grant: “Today over half of all fights operated on the A380 are operated by Emirates and less than 20 carriers globally operate the aircraft type. That in itself tells you how little interest there was from other airlines ” In the end, Grant argues, the “egos” of Emirates and Airbus got the better of sound business decisions. "They got carried away in placing too much emphasis on this idea when others, such as Boeing, felt that we would see longer, thinner long-haul routes emerge with new aircraft technology.”

Tom Enders, Airbus’s chief executive, said the decision was “painful”, but promised customers that the A380 will still “roam the skies for many years to come”. Little over a decade ago, the A380 was seen as the future of aviation. But for Airbus, and the airline industry it relies on, the numbers no longer add up.

This article was originally published by WIRED UK

Paresh Dave

Joel Khalili

Amanda Hoover

Will Knight

Benj Edwards, Ars Technica

Aarian Marshall

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The Rise and Demise of Airbus A380

By: Xuesong Geng, Lipika Bhattacharya

Set in July 2021, this case talks about the launch and discontinuation of the very large aircraft, A380, by leading aircraft manufacturer Airbus. The development of the A380 had been motivated by two…

• Length: 24 page(s)
• Publication Date: Oct 4, 2021
• Discipline: Strategy
• Product #: SMU990-PDF-ENG

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Set in July 2021, this case talks about the launch and discontinuation of the very large aircraft, A380, by leading aircraft manufacturer Airbus. The development of the A380 had been motivated by two key factors - the projected market trend of increased hub-and-spoke travel and the success of Boeing 747 - a very large aircraft by Boeing. Although the A380 was the biggest passenger aircraft ever built, with avant-garde technology and reconfigurable design, it failed to succeed due to changing industry trends. Hub airports were witnessing increasing traffic congestion, and more and more airlines were switching to point-to-point travel to avoid hubs altogether. Demand for very large aircrafts like the A380 fell by almost 92% from 2010 to 2020, and Airbus had to make the harsh decision of shutting down the aircraft's production in 2021. The case describes the high stake decision behind the development of the A380 and how it fared after its launch. It also elaborates the duopoly between Boeing and Airbus, which accounted for 91% of the commercial aircraft market share. The case ends with forward-looking questions on what strategies Airbus can implement after the demise of the A380 to compete with long-standing rival Boeing and new entrants like Chinese aircraft manufacturers in a cut-throat market that was witnessing the commencement of environmentally friendly aircraft projects by the two leading players as the new battlefield.

Learning Objectives

Although one might intuitively blame the low demand for A380 on the changing market environment and the shift from hub-and-spoke to point-to-point model, the analysis in this teaching note shows that it is also partly due to the deliberate strategic moves made by Boeing after the launch of the A380. By providing rich information on Airbus and Boeing's product portfolio, market information, and financial information of A380, this case allows instructors to teach topics such as strategic management, strategic change, and competitive strategies.

Oct 4, 2021 (Revised: Oct 10, 2021)

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Singapore Management University

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Simple Flying

Analysis: 5 reasons why the airbus a380 failed to live up to the hype.

Despite its impressive engineering feats, the Superjumbo faced numerous challenges.

• The A380 faced challenges due to high manufacturing costs and inefficient engines, making it economically unsustainable long-term.
• Airbus misjudged market demand, as airlines favored smaller, more versatile models over the A380's massive capacity and hub-and-spoke model.
• Size constraints, limited runway and gate availability, and inefficient engines contributed to the A380's financial woes, leading to its premature retirement.

The Airbus A380 continues to amaze passengers and aviation enthusiasts. The Superjumbo’s enormous size has marveled the aviation community since its first flight on April 27, 2005. However, the jet is increasingly becoming a rare breed.

Once hailed as the future of air travel with its massive size and capacity, the A380 ultimately fell short of expectations. Despite its impressive engineering feats and luxurious amenities, the A380 faced numerous challenges that prevented it from achieving commercial success. In this analysis, we delve into five reasons why the Airbus A380 failed to live up to the hype.

1 Manufacturing costs

The large capacity came at an even larger price.

When Airbus launched the A380 program in 2000, the manufacturer aspired to challenge Boeing's longstanding dominance with its 747, an iconic long-haul aircraft that had maintained its position since the early 1970s.

Yet, according to Forbes , numerous aviation experts and consultants, airline executives, and airport planners advised Airbus against building the Superjumbo – in fact, even Boeing leaders told their rivals not to pursue the plan.

One of the primary reasons behind the A380's lackluster performance was its exorbitant manufacturing costs. Building such a colossal aircraft required substantial investments in infrastructure, materials, and labor. Additionally, production delays and technical challenges further escalated manufacturing expenses, making the A380 economically unsustainable in the long run.

Why Couldn't Any Airlines Apart From Emirates Make The Airbus A380 Work?

It's worth highlighting that the A380 was not only expensive to build, but also costly to operate. According to Satair , airlines operating the A380 are faced with:

• A roughly $446 million sticker price
• $17,467 per hour in fuel costs (more on this later)
• $8,553 per hour in other operating costs

2 Shift in the commercial travel landscape

Airbus may have misjudged market demand.

When Airbus introduced the A380, it had predicted that the hub-and-spoke model was the way to go for airlines. In this model, one or more large airports serve as central hubs, connecting numerous spokes, which are smaller airports or cities.

Flights from the spokes converge at the hub(s), where passengers can transfer to other flights to reach their final destinations. This allows airlines to efficiently consolidate passenger traffic, maximize aircraft utilization, and offer a wider range of destinations (albeit with fewer direct flights).

Unfortunately, direct point-to-point flights, instead, grew in popularity due to several reasons, including:

Consequently, airlines increasingly favored smaller, more versatile models such as the Boeing 787 Dreamliner. This change in market dynamics undermined the A380's appeal and limited its attractiveness to airlines seeking greater operational flexibility.

3 Size constraints

The a380 was just too big.

According to the BBC , the A380 also boasts more than 5,382 square feet (500 square meters) of usable floor space, enabling carriers to offer spacious first-class suites, as well as bars, beauty salons and even duty-free shops.

While the A380's impressive size was initially seen as a competitive advantage, it ultimately proved to be a liability, as demonstrated below:

The aircraft's sheer size necessitated special infrastructure modifications at airports, including wider runways, reinforced taxiways, and larger boarding gates. Airports would often have to bear the costs of upgrading their facilities to accommodate the A380 – and not all airports wanted (or could afford) to do so.

How Many Airports Can Actually Handle The A380?

As a result, only 140 airports worldwide are capable of accommodating the A380 , severely restricting its route network. Furthermore, airlines struggled to deploy the A380 profitably on routes with sufficient demand to fill its extensive seating capacity, leading to less-than-favourable load factors and revenue losses.

4 Inefficient engines

The a380 was 12% less fuel efficient than boeing’s then-new aircraft.

Despite technological advancements, the A380's four-engine configuration resulted in higher fuel consumption compared to modern twin-engine aircraft. Per Green Worldwide Shipping , some of the most fuel-efficient airliners today are:

• Airbus A350-900
• Airbus A320neo
• Boeing 787 Dreamliner

Retired Airbus sales representative John Leahy blamed the Superjumbo’s failure on inefficient engines, saying to AirlineRatings :

“We launched in 2000, but three years later we got the 787 being launched with GENx engines and Rolls Royce matching that, having a ten to 12% better specific fuel consumption than the A380’s engines.”

According to Head for Points , this 12% fuel efficiency difference represents substantial savings in an industry where even a 0.5% gain can make a difference to commercial viability.

Additionally, the demand for more efficient engines due to the increasing focus on sustainability further penalized the A380's fuel-intensive operations, undermining its viability in today’s eco-conscious industry.

5 Fuel price volatility

Having four engines comes at a price.

As if having inefficient engines wasn’t bad enough, the cost of flying such a large aircraft – with four engines, no less – is significantly impacted by fuel prices. The A380 faced significant challenges stemming from fuel price volatility, particularly in the aftermath of global events such as the 9/11 terrorist attacks and the COVID-19 pandemic.

Soaring fuel prices following 9/11 heightened airlines' focus on fuel efficiency and cost containment, further diminishing the A380's appeal. Similarly, the unprecedented downturn in air travel demand triggered by the COVID-19 crisis exacerbated the A380's financial woes, leading several airlines to retire their A380 fleets prematurely. Thus, it came as no surprise when Airbus announced in 2019 that it would cease production of the A380 in 2021.

Why The Airbus A380 Is The Perfect Testbed For Evolving Engine Technology

Despite its revolutionary design and unmatched passenger experience, the Airbus A380 ultimately struggled to overcome a myriad of challenges. Yet, the Superjumbo will forever be remembered as a marvel of aviation engineering, serving as a case study to shape the design and production of next-generation aircraft aimed at meeting the evolving needs of airlines and passengers alike.

Analysis: 5 Reasons Why No US Operator Has Ever Flown The Airbus A380

• The A380 failed in the US partly due to a lack of a central hub structure.
• Fuel inefficiency and high maintenance costs deterred US airlines.
• US carriers prioritized frequent flights over higher capacity.

The Airbus A380 promised to do what no commercial passenger aircraft had ever been able to do, drastically increasing capacity capabilities and per-seat performance metrics. Introduced into service in 2007 by launch customer Singapore Airlines, the double-decker jumbo was set to be the plane of the future, offering unparalleled passenger comfort and providing airlines with game-changing capacity.

Today, however, the plane's story reads differently. Only around 250 Airbus A380s ever rolled off the manufacturer's assembly lines, and even fewer remain in service today, with production halted back in 2021. The aircraft has undeniably served as a case study of manufacturer sales failure, as the jet was made for a time that no longer existed.

The most glaring failure of the Airbus A380 was undeniably its inability to impact the American aviation market. No airline from the United States ever placed an order. The aircraft had been unable to perform in the sales department in the world's largest aviation market, a major blemish on its record.

Get all the latest aviation news right here on Simple Flying!

But with all the benefits such a massive plane could offer and the rapidly increasing demand for air travel, why did US airlines never order the massive widebody? In this article, we will examine five key reasons why American Airlines, Delta Air Lines, and United Airlines never ordered the Airbus A380.

No central hub

The us market is not built for such a plane.

Among the key arguments against the A380 is that it can only truly be suited for markets dominated by a single hub, through which dozens of daily flights are routed. The major airlines that have succeeded in operating the Airbus A380 include all the following carriers which prioritize connecting passengers through a single global hub:

But the American market falls far from this description, lacking a single central hub. Due to the size of the market, each major airline operates several different hubs across the country, allowing for convenient air service for residents across the nation.

Furthermore, American hubs are structured fundamentally differently than those in Europe or the Middle East, as they are not typically the only US hub to serve a destination abroad. For instance, all major US carriers serve London Heathrow from many different destinations rather than funneling all traffic through a single hub and operating services to LHR from that airport alone.

Big Planes On Small Routes: Why Airlines Sometimes Use The Airbus A380 On Short-Haul Flights

Fuel inefficiency, the aircraft is incredibly expensive to operate.

Airbus often touts that the A380 is the most economical aircraft in the skies on a per-seat basis. This is surprisingly true, but only when an airline is able to achieve high enough load factors on its flights.

When carriers fail to fill their A380s, they can prove serious economic liabilities with four massive gas-guzzling engines. As a result, American legacy carriers, like many across the globe, were hesitant to invest heavily in a plane that could become a major loss.

Examined: The Airbus A380's Unlikely Post-Pandemic Comeback

Expensive support costs, fleet maintenance was extremely costly.

As such a massive aircraft, the A380 requires a robust maintenance network that is not comparable to any other aircraft. As a result, the plane has become known for its astronomical support costs, which include:

• High maintenance costs
• Pilot training costs
• Upgrading facilities to accommodate A380 operations

Keeping a fleet of Airbus A380s well maintained is extremely expensive, and the only airlines that have succeeded with the aircraft have done so due to the sheer scale of their operations or by operating impressive maintenance networks, such as Lufthansa Technik . Furthermore, according to Arup , everything from hangar space to new jetbridges would need to be built to accommodate A380 operations, a heavy cost airlines would likely have to bear the bulk of.

Different scheduling philosophies

Us airlines prioritize quantity of flights over capacity.

Legacy airlines typically schedule multiple daily services in the United States between the highest-demand destinations. Often, they will choose to increase the number of flights between New York and London upon an increase in passenger demand rather than shift to higher-capacity aircraft.

This caters heavily to the demands of business travelers, who are often confined by strict schedules and prefer multiple flights. With so many airlines flying on the busiest routes, carriers cannot afford to lose out on lucrative business traveler traffic because another airline might be flying a more convenient schedule. As a result, US airlines shifted their strategy away from high-capacity widebodies like the Boeing 747 and Airbus A380 and towards most moderately-sized twinjets.

17 Years Of Airbus A380 Passenger Flights: The World's 10 Shortest Routes This Summer

Incompatibility with fleet strategies, us airlines were not interested in such a drastic shift.

Ordering the A380 would have been a major shift in the fleet strategies of all three major US carriers. This is the case for the following three key reasons:

• US airlines were longtime operators of the Boeing 747, so if they were to purchase a high-capacity aircraft, the 747-8 would be an easier choice
• These carriers were all hesitant to order any Airbus widebodies, with only Delta Air Lines operating them today
• American legacy carriers were aiming to begin flying more point-to-point routes, something the A380 was not designed for

At the end of the day, the A380 would be a massive, high-capacity widebody that did not really fit with Delta, American, or United's fleet strategy. Ultimately, they pursued smaller, high-capacity aircraft like the Boeing 787 for their next-generation fleet.

Wow: The US Gains 3 Additional Airbus A380 Routes In May

Would you like to have seen Airbus A380s flying for US legacy airlines? Let us know in the comments!

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“perceived failures” in the projects_ Airbus A380

Analysis on the percieved failures in project, the underlying reasons for these “perceived failures” A case study of Airbus A380. Recommendations on how effective project management could have helped to avoid the problems.

Related Papers

The report investigates factors that led to the A380 project crisis. Analysis of the project revealed that Airbus did not integrate an effective project management model into the project lifecycle leading the project to be two years behind schedule, which eventually led to the costs escalations. The report reveals several lessons to be learned from the A380 project crisis. A project management needs to integrate effective cost management, time management and risk management in the project lifecycle. A mega project such as A380 needs to integrate a detailed risk management, cost and time management plan before project's implementation.

David Pritchard

Introduction The goal of this dissertation is to describe the main economic and political factors underlying the post-1970 decline of the US as a manufacturer of large commercial passenger jets (i.e. aircraft with 100 seats or more). A further goal is to identify the likely sources of future foreign competition in this industry. The main thesis of the dissertation is that foreign producers have acquired a competitive advantage over the US as a result of supportive public policies (e.g. production subsidies), industrial offset agreements (compensatory trade), investment in new manufacturing procedures (e.g. automation), and lower costs. From an industrial futures perspective, the dissertation argues that the US is moving toward a systems integration mode of production (i.e. buy parts from abroad, and assemble at home). This trend implies continued employment losses among US aerospace suppliers, as well as among US aircraft manufacturers. Data for the study come from two main sources. The first source consists of secondary data from corporate reports, industry websites, trade journals, and Federal agencies (e.g. the US Department of Commerce). The second source comes from personal interviews with US and foreign industry representatives, as well as from visits to several aircraft factories in the European Union, Russia, China and the US. The dissertation is organized around three interconnected propositions. First, US aircraft manufacturers must offer industrial offset packages to compete internationally (Offsets are typically organized as production-sharing agreements where the seller transfers part of the manufacturing work to the buyer). Secondly, offset packages deliver aircraft production capability (technology and skills) to potential competitors. Third, Russia, China, and several other newly emerging markets (NEMs) are likely to become serious players in the global aircraft market over the next 10 years or so. Taken together, these three propositions serve as the thematic basis for the dissertation. While the dissertation does not seek to test any particular theory with regard to international business and/or industrial location, some of the empirical findings suggest that certain aspects of Vernon’s (1969) product-life-cycle (PLC) hypothesis are relevant to the US commercial aircraft industry. In particular, the emergence of global subcontracting linkages has in some cases entailed a geographic dispersal of production from high-cost US locations to lower-cost foreign sites (these cases are examined later). In other cases, however, the international decentralization of US production has also included high-cost foreign sites (e.g. Canada, Britain and Japan). This renders the PLC model less pertinent. Some of the dissertation’s findings are also relevant to recent theoretical developments in the field of strategic trade policy (Krugman, 1986). Specifically, the US commercial aircraft industry satisfies all of the current theoretical criteria that define a “strategic industry”. These theoretical considerations, among others, are discussed in the concluding chapter of the dissertation.

Joleber Busa

mustefa mensur

Emmanuel Tyongbea

Hassan H Bodicha

Problem background: The problem of this research paper is centered on project risk management process and its relation to the success of construction projects. Organizations, project managers and all other stakeholders have been complaining of myriads of challenges on how to identify critical factors that can lead to project success. This issue has made these scholars and practitioners to concern themselves with the issue of project success and try to establish some other appropriate factors that measure project success from early as 1960s.These scholars have identified different critical success factors of construction project but how it is impacted on by risk management process is a research gap that this study will try to fill. Purpose: The purpose of this research paper is to establish the effect of project risk management process on the success of construction project. Methodology: The study empirically review literatures on the theoretical framework of project risk management process and its relation to project success in construction industry Conclusions: The study found out that risk factors have significant impact on the success of constructions project success regardless of the type or complexity of the project. This means that the traditional success factors of cost, scope, time and quality are universally inherent in all construction projects and should always be considered as a base for all other forms of critical success factors however this is not a guarantee of project success since the main weakness of project success is not from the traditional success factors but rather the society that is pressurizing project managers to succeed in all tasks. Therefore, critical success factors are necessities aimed at supporting projects managers in tracking various risk factors associated with projects and make an informed decision. Recommendations: Therefore, project managers need to develop a more appropriate critical success factor identification technique in order to avoid the problem of over planning or under planning at the start of the project. When the construction project is being planned, an appropriate measuring tool for critical success factor analysis may need to be identified and defined; this is a gap that needs further research. Also, the literature review on was limited to construction projects only and it is not exhaustive thus confirmation of this work may be done in other sectors. Keywords: Project, risk, risk factors, risk management, project management, project success, success criteria and critical success factors.

Aftab Hameed Memon

Construction projects in Malaysia are currently facing a severe problem of time and cost overrun. It is increasing with the rapid growth in development. The problem of time and cost overrun in resulted from various factors. These factors occur in construction projects at various phases and have different level of risk which is very essential to determine. Hence, this study is carried out through risk matrix for assessing risk level of various factors of time and cost overrun throughout the life cycle of a construction project. This research work involved 35 common factors of time and cost overrun identified from reviewing previous studies published worldwide. For assessing the relatively of those factors and determining their occurrence in various phase of project lifecycle, structured interviews were conducted with 5 experts from construction industry. Experts were asked about the occurrence and severity level of each factor along each phase which were analyzed with average index calculation and risk matrix. The findings revealed that the factors have low and medium risk on time and cost overrun during planning and design phase. While, in the construction phase majority of factors have medium risks and 5 factors have a high risk on time overrun while 6 factors have a high risk on cost overrun. The findings of this study give a better understanding to construction practitioners for risk level of the factors causing time and cost overrun in each phase of construction projects. This will help the practitioners in taking proper actions for improving construction time and cost performance.

Les Cahiers de la Société québécoise de recherche en musique

Marie-Noëlle Lavoie

Dans la France de l’entre-deux-guerres, la scène chorégraphique parisienne est le lieu de profondes mutations. Durant les années 1920, les Ballets russes de Serge Diaghilev s’essoufflent et de nouvelles troupes, notamment celles des Ballets suédois, rivalisent d’audace et bousculent les rapports entre danse et musique. Puis, les années 1930 voient l’ascension de Serge Lifar, jeune danseur d’origine ukrainienne qui prend la tête de l’Opéra de Paris et conquiert la critique ainsi que le public parisien. Cet article examine le discours sur la danse au sein de La Revue musicale et plus particulièrement le débat que suscite la démarche de Lifar. Plus important périodique musical francophone de l’époque, La Revue musicale a fait la part belle aux disciplines artistiques relatives à l’art des sons et tout particulièrement à la danse. Sont ici examinés la place prépondérante occupée par la danse au sein de cet influent mensuel, l’accueil réservé aux créations de Lifar, ainsi que les idées d...

Social Science Research Network

Arto Annila

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