February 25, 2019

Airplanes Enforce Globalisation

There is a duopoly for mid and large size airliners. American Boeing and European Airbus dominates the large civil aviation market. However, when we have a closer look, we see that is not completely true.

In 2017, Boeing spent almost $60 billion with nearly 13,000 suppliers from all 50 U.S. states and 57 countries. Supplier-provided components, services and engineering support make up approximately 65 percent of the cost of Boeing products.

Around 80% of Airbus’ activity is sourced. The company works with more than 12,000 suppliers worldwide that provide products and services for flying and non-flying parts.


Airbus has several final assembly lines for different models and markets;

Toulouse, France (A320, A330 family, A350 family and A380)
Hamburg, Germany (A318, A319, A320 and A321)
Tianjin, China (A319 and A320).
Mobile, Alabama, USA (A319, A320 and A321)

Boeing is not much different;

Boeing Everett Factory (747, 767, 777, and 787)
Boeing Renton Factory (737NG and 737 MAX)
Boeing South Carolina (787)
Boeing Field King County (737)


The ownership structure of these two big players reveals a similar scene.

Here is the top 10 owners of Boeing;

The Vanguard Group                     7.32%
T. Rowe Price Associates              5.93%
Newport Trust Co.                          5.93%
SSgA Funds Management             4.61%
BlackRock Fund Advisors              4.32%
Capital Research & Mgmt             2.72%
Fidelity Mgmt & Research            1.41%
Jennison Associates                       1.39%
Geode Capital Management        1.11%
Henderson Global Investors        1.10%

And, here is Airbus' top 5 owners;

German Daimler                             15%
Germany                                         12%
France                                            12%
French Lagardere Group               7.5%
Spain                                             5.6%

All these numbers and figures show us that civil air transport is a truly global industrie and aircraft manufacturing is highly international process. When we talk about an airplane, we talk about joint venture of many countries and many companies. None of the partners owns the entire business. 

Therefore, it is better to name it as a brand and decision-making competition, rather than a duopoly.  

Next time you fly, take a closer look of all the parts of your airplane. Every piece of it is touched by a different company and country and you are simply sitting inside a globally produced metal tube with wings.