Global Aerospace Industries: Rapid Changes Ahead?

Abstract

This report focuses on aspects of the Boeing-EADS rivalry in both commercial and military markets. Indeed, the Boeing-EADS relationship is one of the major constellations in the international firmament of defense industrial affairs. In this report, we discuss the U.S. Air Force selection of the Boeing KC-46 over the EADS KC-45 in 2011, seeking to understand connections between the associated events. In Chapter II, we also seek to find useful explanatory models for Boeing's success. In Chapter III, we consider the narrow-body airliner market currently a Boeing-EADS duopoly. Narrow-body airliners have been a central to the firms rivalry, as well as a major source of profits for both. As such, these narrow-body families have provided a resource foundation 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 major challenges to the two market incumbents. These outlying firms have already made the market, in some sense, more competitive. If the potential challengers become successful entrants, then Boeing and EADS will have lower profits with potentially major repercussions for both their commercial and defense product lines.