Why are Boeing and Airbus the only commercial passenger jet manufacturers?
In: Economics
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
Latest Answers