12 Jun 2022

344

International Competition between Airbus and Boeing

Format: APA

Academic level: University

Paper type: Essay (Any Type)

Words: 1457

Pages: 5

Downloads: 0

The aircraft industry has its share of vicissitudes' development over the years, just like any other industry. The growth of the airline industry has indeed been a remarkable one. However, with tremendous growth comes intense competition in the industry, this research paper aims at the legendary competition between the two significant aircraft manufacturing industries, the Boeing and the Airbus (He, Hipel & Kilgour, 2017) . The industry's profitable capabilities and immensity have made it difficult for the rivalry aircraft manufacturing industries to back out of the race. Aircraft manufacturing is highly dependent on science; when building a fleet of aircraft, various factors are necessarily considered to ensure the effective and efficient accomplishment of desired goals in the industry. 

The airline industry is regarded as a global industry; that is, customers all over the world have shown similarity in their product needs, and the production is done over various national borders. Studies have revealed that Airbus and Boeing control an estimated ninety percent of aircraft's global commercial production, each receiving an estimated revenue of sixty-six billion and eighty billion euros each year (Singh, 2016) . Since the 1970s, the year that saw the Airbus aircraft manufacturing industry's creation, this created the duopoly between Airbus and Boeing, which has created intense competitive spirits that extend further to even small percentages the existing market shares. 

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History explains that the entrance of new competitors integrated with shifts in the industry and technological advancement in an industry may cause the existing duopoly or monopoly companies to fail (Steinemann, 2016) . However, raising competition with duopoly airline manufacturing industries seems to be an uphill or challenging battle. It has been revealed in reviews where companies that even do not pose direct competition against the duopoly aircraft manufacturing companies being placed under their radar. In cases where other airlines may develop an interest in the smaller regional jets, the duopoly and significant aircraft manufacturing companies, Airbus and Boeing step in quick response by acquiring the companies responsible for the production of those smaller aircraft (Steinemann, 2016) . The regional jet produced by Bombardier was acquired by Airbus, taking a fifty-one percent stake when news had it the Delta Airlines had placed an order. In a similar case, Boeing acquired the Brazilian jet from its producer Embraer; this is a clear sign that the two major companies in the aircraft manufacturing industry would not easily give up their top spots in the airline industry hierarchy chain. 

Population and Sampling Procedure 

The research, development, and aircraft production process has been exposed to the public eye in a long time. The population used for the study of the saturation of the competitive nature in the aircraft manufacturing sector, featuring the two major companies in the industry consisted of six hundred passengers based on each passengers' history in traveling with the selected aircraft, that is; the Airbus or Boeing manufactured aircraft (Shaw, 2016) . The population under study had to have at least traveled in the aircraft for the last two years. In the previous decade, the online population's creation has greatly helped researchers collect data under a vast population of study diversely. These aids cover large regions avoiding biases. Research done in the aircraft industry has found the online population technique of acquiring a more advanced population of the study, more effortless, and laced with new opportunities. 

One of the major challenges faced by researchers in the capability of gaining access to a population study, this is mostly attributed by the restrictions placed by airline industries and their unwillingness to avail instruments and data in a race to protect their members in the airline industry against unnecessary solicitations (He, Hipel & Kilgour, 2017) . There are more significant concerns of breach of trade of secrets policies, inappropriate use of data provided, and proprietary information availed. However, with the online population survey, researchers are hitting the bonus of collecting data in large volumes and less costly than traditional methods of acquiring data from the target population. Some of the factors making online population survey more preferable are; a collection of more timely data, more ease in access to new target populations, less costly, more reliability of data collected, the existence of anonymity of the participants in the research, capability of accessing a balanced gender ratio and access to larger samples. 

The study conducted followed a convenience sampling procedure. The sampling was done in the online portals; questionnaires were filled out by the passengers on their experience traveling in different aircraft types from their airlines (Shaw, 2016) . The structured questionnaires filled and submitted by other respondents had two sections; the first handling factors relevant to each participant's demographic profile. The rest of the unit was structured to evaluate those participants' experience using the aircraft from the companies in question about their experience in relevance to comfort, safety, and satisfying experiences. 

Data Collection Technique 

A positive paradigm was considered during the research because of its significant reliance on both estimations on quantity and statistics, enabling the drawing of practical conclusions (Williams, 2017) . Several questions popped up in my research: Do new entrants pose a risk to existing companies in the aircraft manufacturing industry? What is the nature and criteria of competition? Did the deregulation of laws in the airline industry impact competition levels? What are the five force models of analysis as per Porter concerning the airline manufacturing industry? What prompts loyalty and acquisition of a larger market share in target markets in the airline manufacturing industry? 

Do new entrants pose a risk to existing companies in the airline manufacturing industry? Studies reveal that the airline industry will have new passengers; this creates new opportunities to manufacture new aircraft (Odoni & Barnhart, 2015) . Both internal and foreign direct investment as a variable towards controlling market shares in the new target market determines the technological advancements adapted and the control of the industry's industrial shifts. The question determines the future intensity of competition in the airline manufacturing industry. 

What is the nature and criteria of competition? A tight competition among the Airbus and Boeing company has made airlines the more massive benefactors of the rivalry as they get to choose from a range of seats (Odoni & Barnhart, 2015) . Attributed to the dependent aircraft design of the company's aircraft, the production of similar typecast aircraft has made them more incredible competitors against each other. However, the rivalry companies pride themselves with an extended range of products in different segments. 

Did the deregulation of laws in the airline industry impact competition levels? What are the five force models of analysis as per Porter concerning the airline manufacturing industry? Attributed to Michael Porter's model analysis, there exist five forces that give a company the attractive needed to keep higher market shares (Button, 2017) . These are; buyers, new entrants in the industry, suppliers, substitutes, and different competitors existing in the airline industry. Deregulation in the airline industry has seen tremendous growth; however, it has increased the industry's competition levels. Studies show that deregulation in a country can notably cause a surge in the airline industry's development and growth levels when effectively integrated or laced with the competition. Deregulation in the airline industry also caused significant changes in the structure of the aircraft manufactured. It has seen the increase in the choice of carriers made by passengers and market concentration level changes for various aircraft manufacturing industries. 

What prompts loyalty and acquisition of a larger market share in target markets in the airline manufacturing industry? The companies' ability to see through sustainability and development of their products by standing capitalistic and political factors has made Airbus and Boeing effectively keep their top positions in the airline hierarchy chain (Ater & Orlov, 2015) . Their ability to drive sales laced with substantial risks, investing large amounts of capital; that is, the production cost with little guarantee of success has offered them loyalty in the target market, gaining them the more extensive market shares. 

Primary data was collected for the research on the intense competition in the airline manufacturing industry. Primary data was collected through the structured questionnaires posted on the online population survey portals. The questions were strategically paraphrased in the statement form scored on a four-point Likert type of measuring scale, ranked from the first, "strongly agree" to the fourth, which stated, "strong disapproval." 

Sample Of Questionnaires 

Section A 

Respondents demographic profile 

Serial number appointed: __________________ Date: _________________ 

Gender: __________________________________ 

Number of air travels: ________________________ 

Section B 

The use of Boeing aircrafts provides a safety assurance when traveling. 

Strongly agree _________ Agree ______________ 

Disapprove ______________ Strongly disapprove __________ 

Airbus aircrafts provides better reassurance when traveling in them 

Strongly agree ___________ Disapprove _________ 

Agree ___________________ Strongly disapprove __________ 

Boeing aircrafts are more comfortable to travel in 

Strongly agree ______________ Disapprove _____________ 

Agree ______________________ Strongly disapprove _________ 

Airbus aircrafts provide a comfortable experience when travelling in 

Strongly agree _________________ Disapprove ________________ 

Agree _________________________ Strongly disapprove __________ 

Which brand of aircraft gave a more satisfying ad preferable experience 

Airbus 

Strongly agree _______________________ Disapprove ___________ 

Agree ________________________________ Strongly disapprove _______ 

Boeing 

Strongly agree _______________________ Disapprove ___________ 

Agree ________________________________ Strongly disapprove _______ 

Hypothesis Testing 

The most effective metric used over time concerning analyzing competition in the airline manufacturing industry has been the market concentration, which analyses the hierarchy in the battle for consumers in the industry. They are testing the hypothesis concerning the market concentration regarding safety, comfort, market size, and effects of vertical relationships in cases of privatization of airports. The results revealed that the critical driver of concentration and staying in the airline manufacturing industry's competition is held by the industry's strategic investment in capacity. 

References 

Ater, I., & Orlov, E. (2015). The effect of the internet on performance and quality: Evidence from the airline industry.  Review of Economics and Statistics 97 (1), 180-194. Belobaba, P., Odoni, A., & Barnhart, C. (Eds.). (2015).  The Global Airline Industry . John Wiley & Sons. 

Button, K. (Ed.). (2017).  Airline deregulation: international experiences  (Vol. 1). Routledge. 

He, S., Hipel, K. W., & Kilgour, D. M. (2017). Analyzing market competition between Airbus and Boeing using a duo hierarchical graph model for conflict resolution.  Journal of Systems Science and Systems Engineering 26 (6), 683-710. 

Shaw, S. (2016).  Airline marketing and management . Routledge. 

Singh, A. K. (2016). Competitive service quality benchmarking in airline industry using AHP.  Benchmarking: An International Journal

Steinemann, A. (2016). Fragranced consumer products: exposures and effects from emissions.  Air Quality, Atmosphere & Health 9 (8), 861-866. 

Williams, G. (2017).  The airline industry and the impact of deregulation . Routledge. 

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