Travelling has become very easy and cheap in the last few years. You just have to book your flight early in order to be able to travel all over Europe for less than 60 Euros. For example, if you want to go in Spain, you can visit the website of Ryanair, choose your flight and book it. Generally, the round trip costs less than 60 Euros. This is an incredible phenomenon!!! The Global civil aerospace industry is a war between two actors: Boeing and Airbus, the American and the European company. After the record of producing the biggest plane of the world, the Airbus 380,which has a capacity of 555 passengers (853 maximum), Boeing tried to achieve the record of the longest nonstop flight- 11000 miles in 23 hours. The Global civil aerospace industry is an oligopolistic market with two competitors and very few potential customers, contrary to other markets like the automobile market which includes a lot of brands car like Ford, Renault, Volkswagen, BMW and Mercedes. These brands have a lot of potential customers. When an airline company like American Airlines orders planes to increase its fleet, it involves an investment of billions. This explains why the global civil aerospace industry is so careful.
[...] (Projected information). Years behind Airbus concerning R&D In Asian market: 72% in 2006 No fly-by-wire technology In Latin America market: 47,3% A lack of government implication The strategic partnership, a good when Boeing negotiates new management. contracts A worldwide company. Too important number of suppliers An organisation which has to be less centralised with more flexibility. Opportunities Threats In the next 20 years: Introducing of Embraer's airplane Annual world economic growth rate of in the 100 seats market with adapted technology. [...]
[...] The Airbus products are more competitive than Boeing's one. Indeed, the Boeing's range of products is obsolete because the company doesn't invest enough money in Research and Development. For example, in 2006, Airbus has invested more than 15% of its turnover in Research and Development, that is to say 5 billion Euros. On the same time, Boeing has just invested of its turnover in R&D. If Boeing wants to have the same R&D's level of Airbus, the firm has to invest from 40 to 50 billion USD over the next 15 years. [...]
[...] A strong lag time exists between the needs of the customers and the operational offer. Indeed, the key driver is the passengers and when airlines companies perceive an increase of the number of passengers, they keep the same fleet because this growth is maybe not durable. Furthermore, if the number of customers still rises during a long time, airlines companies order new planes. Analysis of Boeing[1] says that the global market will be worth $ trillion in 2025. Indeed, with the boom of the low cost, travelling by plane is become the cheapest and the most safety transport of the world. [...]
[...] Finally, the American giant must carry on increasing market shares in China because it is an emergent country which plans to order 30% of the worldwide delivery in the next 20 years, that is to say 8170 airplanes. It is not possible to underestimate this powerful market. Boeing has been the largest private commercial aircraft manufacturer worldwide during a long period because it was in a near monopolistic market. When Airbus appeared, it was less easy and funny. Currently, two competitors want to become the worldwide leader position and Boeing has to react quickly to maintain its position. The American giant is still the world market leader, far from Airbus and Embraer but Boeing can't make mistakes. [...]
[...] Additionally, it must include the fly-by-wire technology in every type of new Boeing product in order to be more attractive for the airplane companies and to have the same advantage of its competitors, Airbus and Embraer. Moreover, global market will be worth $ trillion in 2025 and Boeing must be ready to satisfy this demand. Secondly, Boeing has to convince US government to help him when it makes important contracts abroad. Indeed, government has a lot of influence and Boeing has to use this strength to increase its purchases. Thirdly, Boeing has to convince its customers (airline companies) to share a more important part of the financial risks than today. [...]
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