3 ms·

>Boeing & Airbus owning a combined 91% of the global market share in airliners I would be careful here since this is true today, and maybe for a decade or two,

>Boeing & Airbus owning a combined 91% of the global market share in airliners I would be careful here since this is true today, and maybe for a decade or two, but not for long. China seems to be laser focused on improving their domestic capabilities and moving up the value chain. They already have Africa in their hands as a major export market.

bobthepanda 6y ago
Airplanes are a notoriously hard industry though. Particularly making the high-tech, fuel efficient ones that are the things airlines actually want, at a unit cost that is not very expensive. Airbus A350 program cost was €11 billion. Boeing 787 Dreamliner was $32 billion. Bombardier threw in the towel this year and Embraer almost sold to Boeing. Russia has tried to build an airliner for export and failed. So has Japan. You can throw a lot of money at the problem and still never come out on top. And even for the big two times are tough; the 787 program needs 1300-2000 planes to sell to break even. Depending on how you do the accounting Airbus A380 never broke even. Which leads to the other problem; product market fit. Airlines are notoriously fickle and it's hard to figure out market fit, particularly if a requesting airline changes its mind after reviewing their strategy or the aircraft's characteristics once in production. McDonnell Douglass had to merge with Boeing because the MD-11 was not performing as expected and then nobody wanted to buy it. Lockheed exited the civil aviation business because it nearly bankrupted them after they couldn't build a plane to the promised spec. Convair stopped making entire planes after the failure of their 880 and 990 because it turns out "slightly faster but smaller" wasn't a real market niche. Everyone got cold feet around Concorde and the various SSTs. And even Airbus almost folded; its first aircraft did not sell anything between December 1975 and May 1977.

bobthepanda 6y ago

Airplanes are a notoriously hard industry though. Particularly making the high-tech, fuel efficient ones that are the things airlines actually want, at a unit cost that is not very expensive. Airbus A350 program cost was €11 billion. Boeing 787 Dreamliner was $32 billion. Bombardier threw in the towel this year and Embraer almost sold to Boeing. Russia has tried to build an airliner for export and failed. So has Japan. You can throw a lot of money at the problem and still never come out on top. And even for the big two times are tough; the 787 program needs 1300-2000 planes to sell to break even. Depending on how you do the accounting Airbus A380 never broke even. Which leads to the other problem; product market fit. Airlines are notoriously fickle and it's hard to figure out market fit, particularly if a requesting airline changes its mind after reviewing their strategy or the aircraft's characteristics once in production. McDonnell Douglass had to merge with Boeing because the MD-11 was not performing as expected and then nobody wanted to buy it. Lockheed exited the civil aviation business because it nearly bankrupted them after they couldn't build a plane to the promised spec. Convair stopped making entire planes after the failure of their 880 and 990 because it turns out "slightly faster but smaller" wasn't a real market niche. Everyone got cold feet around Concorde and the various SSTs. And even Airbus almost folded; its first aircraft did not sell anything between December 1975 and May 1977.