Boeing vs. AirbusAirbus and Boeing have created a duopoly in the aviation industry where just two companies dominate a market. This market dominance began after Airbus entered the market as a consortium of France, Germany, later Spain and Great Britain; significant competition began between the two companies as they sought to gain market share. As a result of the rigorous competition, existing competitors such as Lockheed Martin and British Aerospace failed to maintain their position in the industry, becoming manufacturers of aircraft components or acquired by one of the two companies. Boeing had enjoyed a certain degree of monopoly power until the 1980s, before Airbus strategically entered the industry to curb Boeing's monopoly power and gain market share that significantly impacts national economic growth. Airbus made a strategic move in its early stages; it could achieve its current success primarily through heavy investments in research and development and new design technologies and advanced product offerings that outperform its competitors, even Boeing. Airbus's success marked it as a viable competitor to Boeing. There is a logical explanation for the duopoly in the aviation industry; the aviation market requires significant and consistent investment in capital equipment, and the global aviation market is capable of supporting only a few companies capable of achieving economies of scale with sufficient sources of research and development investment. Government subsidies have played an important role in the aviation industry. Without subsidies, companies could not sustain their position in an industry that requires high R&D expenditures and has large risks associated with launching a new aircraft; other manufacturers could not The importance of an aircraft produce...... middle of paper ...... be efficient compared to other competitors. In the airline industry the demand for single-aisle is increasing as point-to-point airlines like Southwest win the market. The aviation industry is not effectively structured due to the subsidies both companies receive from governments. They have taken this help for granted for a long time. Both fail to integrate manufacturing operations and suppliers located in dispersed areas, increasing transportation costs and causing delivery delays when products launch. It is difficult to achieve a development model with a wide range of product offerings without consistency adopted by both. Cross-subsidies in production that increase setup costs and . If outsourcing is managed rigorously, outsourcing can bring significant benefits but apparently creates as many problems as it has benefits.