Hello everyone,

It is common knowledge in the commercial aviation industry that the market is a duopoly between Airbus and Boeing. How did this come to be? Is it because other companies lack the engineering capability to design such an aircraft? Or is it because of the capital costs involved? Let's dive in!

In the early days of air travel, flying was a luxury and was accessible only to the rich. However, as time passed it slowly became accessible to the common man, with the coming of large widebody aircraft with high capacity and good fuel efficiency in the 70s. At this time, there were 5 major manufacturers in the market,

• Airbus - A300/A310
• Boeing - 747 and 767
• Lockheed L1011
• McDonnell Douglas DC-10/MD-11
• Ilyushin - Il 86

However, over the years these manufacturers either became irrelevant or exited the market. McDonnell Douglas was acquired by Boeing in one of the largest deals in history for the aerospace sector in 1996. Ilyushin was a Soviet heavy aircraft manufacturer whose aircraft were used only in Communist bloc countries. Their high fuel consumption and maintenance costs meant that the Il 86 was not of much significance in the international market. Lockheed's L 1011 was a fantastic aircraft but it was too advanced for its time and failed commercially due to high capital costs. Lockheed then exited the civilian aviation market for good and focused on defense.

The real reason as to why all this happened lies in the details.

Constructing a new widebody aircraft is a complex task which requires a large team of engineers working for about 10 years to complete. With evergrowing demands from airlines for better fuel efficiency, this workload is only increasing with each passing year. Aircraft today are more versatile, quieter and lighter than their older counterparts. This means that to recover the capital cost effectively the manufacturer requires atleast 350-400 sales to break even while being competitively priced.The Airbus A380 is infamous for being unable to break even due to a small order volume of 254. Even the Boeing 787-9 Dreamliner, the bestselling widebody of all time with over a thousand orders is not forecast to break even. (This can be attributed to the high cost of introducing multiple innovations in 1 aircraft and outsourcing a lot of the construction to Japan and Italy. Boeing's terrible quality control in the past has only made this problem worse)

Analysis of the widebody market shows that in each market segment of capacity and range, varying from the lower end (B787/A330) to the upper end (B747/A380), the market demand is about 800-1000. This means that there is space for only 2 manufacturers for aircrafts with capacity between 280-550 passengers. This effectively makes the barrier to entry for any other company extremely high.

The situation is comparable for the regional jet market, where the total demand is 1,500 planes at most (for a 10 year period). This is what led to the failure of the Mitsubishi Spacejet, along with other factors. It also led to Bombardier selling its highly advanced C-Series aircraft program to Airbus, who has made it into a market leader with over 500 planes on order. This leaves only Embraer and Airbus in the market.

The situation in the narrowbody market is a bit differet, as the demand is exceptionally large, in excess of 12,000 planes. The backlogs for the bestselling MAX family and Airbus A320neo family are quite long and will guarantee production for a decade to come. In fact, these aircraft are so popular that they are in the Top 40 list of most produced aircraft of all time!(despite costing a 100 times more than other aircraft in the list) Some airlines wait for years to receive aircraft as a result. This strong demand has spurred on 2 new entrants to the market, UAC and COMAC.

UAC is a Russian consortium of companies. It has developed the MS-21 airliner which is by far the best jet in this segment. Its fuel efficiency, passenger comfort are unmatched. This is attributed to the widespread use of composites in the aircraft unlike other companies. However, as a result of international sanctions, UAC is working on replacing various Western made components for Russian ones. It has led to the orders being mostly limited to within Russia.

COMAC is a Chinese company which has developed the CR919 airliner. It is technologically quite similar to the previous generation of the Boeing 737(737-NG). However, being propelled by the might of the Chinese government and state run airlines, it has accumulated over 500 orders. It is likely to see more sales in low income regions such as Africa as manufacturing ramps up. If the Chinese succeed in making their own turbofan engine, they might also get orders from Iran whose aviation market is quite large and underserved.(also because of international sanctions)

Therefore, even in the future the narrowbody market is likely to be dominated by Airbus and Boeing.

In the future, if India wishes to build a successful commercial aircraft, it must either be in this category or in the much smaller 2tMTOW category of piston engined aircraft. This is why the NAL-Saras has failed despite being technologically quite good. The SARAS has failed to attract airlines under the UDAAN program as well. (the UDAAN program has had very limited success as well, but that's a story for another day)

What do you think? Let me know in your replies!