The Judgement and Evaluation of Long-Term Investments Demonstrated by Means of a Civil Aircraft Program,
MESSERSCHMITT-BOELKOW-BLOHM G M B H MUNICH (GERMANY F R)
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The economic characteristics of the civil aircraft industry are somewhat unique terms of the magnitude of investment and the risks involved. Civil aircraft programs represent complex risk ventures that are accomplished in an environment of constantly changing market conditions, competitive actions and technological alternatives. The objective of this lecture is to demonstrate the particular economic aspects of the civil aircraft industry, which are to be taken into account, when preparing a decision for a new aircraft program. The subjects discussed are organized under three major sections. The first provides a short overview of the economic realities of the civil aircraft business. The second major section of this presentation focusses on how to comprehend adequately all these factors in one transparent calculation in order to describe the main criterial milestones in a civil aircraft program, with special emphasis on financial aspects. The question to be answered in this part is What are the criteria for judging such a program The third section deals with the separate discussion of the influencing factors and their changes. The question to be answered in this section is How does the risk and the economic success of a program change if one factor changes. Special emphasis is put on the impact of the development costs and the development leadtime.
- Economics and Cost Analysis