Why do Airbus and Boeing Dominate the Aviation Industry?
Since the 1990s, Airbus and Boeing’s competition has been characterized as a duopoly in the global airliner market. You may have noticed that almost all commercial aeroplanes around the world are either Airbus or Boeing.
Back in the early days of commercial aviation, the well-known commercial airliners are from other manufacturers such as Lockheed Martin, McDonnell Douglas, Convair, British Aerospace, and many more. These companies can no longer compete with the two giants in the industry and effectively withdrew from this market.
This duopoly is a result of a series of mergers within the global aerospace industry. With Airbus, it was because of the European consortium. With Boeing, it merged with its former rival, Mc Donnell Douglas.
Many airline companies’ fleets are composed of Airbus or Boeing aircraft. If a new competitor is entering this market, it would be tough for them to have a lot of scale and cash. Airlines can’t easily switch to a different manufacturer because it would cost them a lot of money for pilot training, maintenance, and spare parts.
Bombardier and Embraer are manufacturers of smaller planes used by regional airlines that provide feeder flights. Both have developed slightly larger jets than their traditional small passenger planes. But these two ended up selling control of their business rather than competing with the two giants. Airbus bought Bombardier, and Boeing bought Embraer, which made them more dominant in the market.
There is a lack of competition, and it is because of the enormous capital expenses involved in building and developing a commercial plane. It might be hard for the new competitor to convince airlines to order aircraft from them and switch from its current planes.
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