Global Aerospace Industries: Rapid Changes Ahead? (Abridged)

Abstract

This paper is prepared for the Ninth Annual Acquisition Research Symposium, as an abridged version of a longer report. We focus on certain key aspects of the EADS Boeing rivalry which, among other things, is one of the major features of international firmament of defense industrial affairs. We discuss selection of the Boeing KC-46 over the EADS KC-45 in 2011, seeking to understand connections among the associated events. We also seek to find useful explanatory models for Boeing's success, discussed in Chapter II. In Chapter III, we consider the narrow-body airliner market, currently a Boeing EADS duopoly. It has been a centerpiece of the firms rivalry, as well as a major source of profits for both. As such, these narrow-body families have provided resources for a number of wide-body developments, some of which have become part of the defense marketplace. The narrow-body market has been so profitable that other firms are positioning themselves to mount challenges to the two incumbents. These outlying firms have already made the market more competitive in a real sense. And, if these potential challengers become successful entrants, then Boeing and EADS will have lower profits, with major repercussions for both firms and their defense customers.