Why are Boeing and Airbus the only commercial passenger jet manufacturers?
In: Economics
Because they bribe the government to get rid of their competitors. See bombardier and the C’s turned a220.
One note I don’t see mentioned is the relative lack of innovative space in the commercial aviation industry. There just aren’t a lot of ways you can eek out a competitive advantage as an aircraft manufacturer. Everyone uses the same small number of suppliers for wings, avionics, engines, etc. Even if you had the billions of dollars to invest in a new aircraft manufacturer, there’s no guarantee that your product will stand out against the competition.
As the saying goes, “if you want to make a million dollars in the aerospace industry, start with a billion dollars.”
There used to be more back when the world market was smaller, but planes are so stupid expensive to design that if every one back then wasn’t a home run then they wouldn’t have the cash to develop the next plane and quickly are out of the market. We’ve now stabilized at two, and when they don’t royally screw up there’s enough parity that each can confidently bring a plane to market and capture enough of it to not risk going under.
Lockheed had the brilliant L1011, but engine issues betrayed it, it didn’t sell well, and with no other modern airlines in its portfolio it had to exit the market.
McDonnell Douglas put all their chips into the DC-10, which had so many major issues it didn’t give them the cash flow to replace their MD-80 series of smaller jets, which at 5 seats across were getting handily beat in the market by the 6 seat across 737 and A320. They merged into Boeing.
Fokker had smaller 5-abreast and rear-engined planes that were quite similar in design to the McD planes. They nearly bankrupted themselves modernizing the old design, but did bring them to market where they were promptly obsoleted by the 737 and A320, which did bankrupt them.
Dornier tried to re-engine their fantastic 328 turboprop into a jet, but engine reliability sunk it and the market wanted bigger planes besides, and the company folded with the bigger one still in design.
Bombardier had business and military aviation sides to support its fledgling jet airliner businesses. They converted a biz jet to a smaller airliner and hit a sweet spot with market timing. The CRJ was a huge success. They followed it on with a fantastic C-Series, but didn’t get any market penetration against the big two. Eventually Airbus bought it, re-christened it the A220, and its sold fairly well since. BBD is out of the airliner market.
Embraer also has business and military sides to support it, and also had a hugely popular regional jet. They created an all larger platform that was great, and the smaller of the variants sold like hot cakes as the newest and best regional jet. The larger has been kind of meh, just too small to be a good mainline jet and too big to be a regional. They updated both, but now they’re both too small to be mainline and too big to be regional. Awkward spot, but they’re still selling, and it remains to be seen if they’ll ever push to bigger.
Economies of scale. It takes a ton of time and billions of dollars to design a larger plane. However, the market for larger planes is really not all that big, and existing airlines are fairly loyal to Boeing and Airbus because it’s what their existing operations are designed around.
So if you can’t find enough customers to sell your planes to, then all those billions of dollars of design cost get spread over a very small number of planes, which means that your per-plane cost won’t be competitive relative to Boeing or Airbus.
There is a Chinese contender, COMAC, but it hasn’t been certified by the US or European Union.
Doesnt tupolev make commercial jets too?
https://en.m.wikipedia.org/wiki/Tupolev_Tu-204
An amazing Wendover video that goes into detail about Boeing, basically it’s not easy to make new planes. [How Boeing Lost its Way](https://youtu.be/URoVKPVDKPU?si=lcZ79L-ZeN0Lzchk)
You mean Lockheed isn’t still making the L-1011?
Deregulation.
30 years ago there were 7-8 aircraft manufacturers serving 20 or so US airlines.
Everyone was allowed to buy everyone else up, now there are 2 manufacturers and 5 airlines. And the airlines are not done merging. There are merger rumours all the time. If we don’t stop them they will end up a duopoly as well.
Because Rolls Royce screwed over Lockheed so badly on the L-1011 they decided never to do another civil airliner again.
Latest Answers