1. Flying the A-380 The Case for Bigger Aircraft MIT meets Lufthansa 2003

2. 09 January, 2003MIT meets Lufthansa, 2003 Agenda The Challenge Key Issues and Concerns A-380 Technical Requirements and Operating Procedures Consequences Summary

3. 09 January, 2003MIT meets Lufthansa, 2003 What consequences will Entry-Into- Service of the A380 have for an airline in terms of net management? The Challenge

4. 09 January, 2003MIT 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

5. 09 January, 2003MIT meets Lufthansa, 2003 Flight Scenario Planning Departure: -C-Check In -G-Gates -A-Aircraft Servicing Flight: -Seats -Distance -Cabin -Crew Requirements Arrival: -Airside Capacity -Alternatives Maint. Contingency Planning Delays Security Rerouting Evacuation

6. 09 January, 2003MIT 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

7. 09 January, 2003MIT 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

8. 09 January, 2003MIT meets Lufthansa, 2003 Network Structure Options Point-to-point Network-to-Network (around the world) Hub-and-spoke Charter / non-network flying

9. 09 January, 2003MIT meets Lufthansa, 2003 Network Structure Options Point-to-point Network-to-Network (around the world) Hub-and-spoke Charter / non-network flying

10. 09 January, 2003MIT 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

11. 09 January, 2003MIT 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)

12. 09 January, 2003MIT 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

13. 09 January, 2003MIT 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

14. 09 January, 2003MIT meets Lufthansa, 2003 Thanks for your attention !