Why are Boeing and Airbus the only commercial passenger jet manufacturers?
In: Economics
Honestly, it’s just really, really expensive to develop and build aircraft. It cost Boeing $5.5 billion to develop the 787 — not a lot of companies will have $5.5 billon around develop, nor could they raise it without a clear plan of how they would make it back.
If you’re an airline, would you want to purchase an aircraft from a company that has no track record of development?
It’s about high entry costs. Entry costs mean the amount you have to invest to be able to compete in the market, in this case for commercial planes. Developing and designing a plane, and building a factory to build your plane, and arranging supply chains, costs literal **billions.**
This means any new entrant would have to bet billions upfront that they could sell their planes. And then they would face fierce competition from Airbus and Boeing. Essentially anyone with billions to invest somewhere can find a better investment.
Another angle to consider is that Airbus (and maybe Boeing too) was created through mergers of existing plane manufacturers. Essentially as airplanes became every bigger and more complicated, it was easier to tackle the rising R&D costs by teaming up
They’re not… but other aircraft manufacturers only make smaller planes (Fokker, Bombarier, Embrar). But for large jets, it’s a market with super high barriers of entry, between the costs and time to design and certify a new plane as well as the scale of the manufacturing plants needed. And there are very few customers — only a few dozen airlines globally, who tend to buy in large quantities.
So how would a company finance the development of a plane that might cost many billions of dollars and a decade or more to develop, then need to find buyers, and then need to build the infrastructure to produce in quantities airlines want?
They are not the only one. ATR, De Havilland, Embraer, UAC, Antonov, Comac, Irkut, Xi’an are all relatively big commercial airliner manufacturer. Airbus and Boeing are just the two biggest and more well known.
Others have talked about the size of the market (in terms of the number of customers) and the high entry costs, and those posts are correct and are the reason why no one starts a new passenger aircraft company today
However, it’s only half the story. There USED to be many companies making passenger aircraft. Over time they have merged into Boeing (mostly) so in the 60s and 70s when the market was just getting going there were many, but over time the successful one(s) bought the smaller ones and kept getting bigger
But at one time there was McDonnell, and Douglas who merged into McDonnell Douglas. Eventually, Boeing then bought MD. There were others, of course, but over time all of the American companies have ended up as part of Boeing as it got bigger and had the sole ability to buy up all the little guys
There’s a ton of commercial aircraft manufacturers, it’s just that Boeing and Airbus currently dominate the market for passenger aircraft.
They’ve got the money and time to test the shit out of a new aircraft design (manufacturing issues Boeing are facing is not indicative that the planes DESIGN is any less safe) that’s gigantic. The USA loves Boeing because they’re a domestic company.
There’s a ton of smaller aircraft manufacturers that sell to private owners or charter jet services. Aircraft last a lot longer than say a car, so the market is relatively small. For instance, in 2010 Boeing delivered 380 planes. That’s not really a ton if you think about it, considering how important air travel is globally.
The Boeing 747 was the first commercial widebody, followed by the [DC-10](https://en.wikipedia.org/wiki/McDonnell_Douglas_DC-10) and the Lockheed [L1011](https://en.wikipedia.org/wiki/Lockheed_L-1011_TriStar?wprov=sfti1#Production) (pronounced El ten eleven).
From Wikipedia:
> The TriStar’s rivalry with the DC-10 has been seen as a “case study in what can happen when two manufacturers attempt to split a market that simply could not support both aircraft”.
Combine that with the fact that European governments subsidized Airbus, and we went from four to two
Because it’s an extremely difficult thing to do, and requires a long history of manufacturing to be competitive. Designing and building a large airliner that is safe take vast resources, especially if you’ve never done it before. We’re talking years of R&D. The chances that you’d be able to do it better than an established competitor and still turn a profit are low.
Both Boeing and Airbus started when things were simpler, and have built up to this point. Besides, the market is only so large. Anyone trying to get into it would have to take sales from them. The only way to do that is to offer something better or cheaper.
There used to be others…. Lockheed (Tri-Star), McDonnell-Douglas (MD-80)… but they either stopped making planes (Lockheed). or bought out by Boeing.
Russia has Ilyushin, Sukhoi and Tupolev.
In addition to what the others have mentioned, i wanted to add that Bombardier developed and and built a relatively larger aircraft that did compete with Boeing and they were subsequently sued for reasons. They had to sell the design to Airbus because they couldn’t afford to continue. I don’t have the details but it’s an interesting story if you want to look it up.
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