Bellerbys Economics - Mr Stephenson

Friday, January 04, 2008

Civil Aerospace

One of the most expensive markets is the civil aerospace market. For many years, this was dominated by Boeing, the US aircraft company, which at one stage had 75% of the world wide-bodied market. In the last 20 years, however, this has fallen to 50% as the EU's Airbus consortium has clawed back market share.

But the future is looking a bit shaky for this cosy duopoly. Recently, President Putin ordered the creation of a single Russian aerospace consortium as part of his policy of creating national champions that can compete in world markets. The merged company, to be called the United Aircraft Corporation, will combine Sukhoi, MIG, Tupolev, Irkut, Ilyushin and Yakovlev under one authority. At first, they will only produced regional aircraft, but they are ambitious and hope to re-enter the wide-bodied market within the next 10 years now that the Ilyushin-96 is being phased out.

China is also gearing up to enter the market. The regional jet ARJ-21 will begin service later this year and the Chinese authorities have merged together the civil aviation company (AVIC-1) andf the military aviation company (called I believe AVIC-2) to form one company with the aim of producing a wide-bodied craft by 2020.

Meanwhile, we should not lose sight of Embraer, the profitable Brazilian manufacturer who also concentrate on regional jets. They are also not short of ambition.

2 Comments:

  • in my opinion this is a reasonable and gratifying phenomenon. monopolisation naturally is not a good thing.it makes the price higher and the quality of service remain stagnant.nowadays ,dueing to the strong competition,as comsumers, we can enjoy the higer class service with lower price.therefore we should encourage the new world class aircraft company and gain some new flying experience.

    By Blogger Eric Ma, at 6:15 am  

  • in my opinion, i really agree with what eric man said.Monopolisation shows the worst competitive tactic in the market which is also belonged to a illealisation like barrier to exit,barrier to entry.so, in terms of the progressing of the world, more new aircraft company can remain the development of the economic

    By Anonymous steve wei, at 11:06 pm  

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