Question

Despite its recent troubles, Boeing is still the United States' only producer of large civilian jet aircraft. Why is that? Using concepts from chapter 5, discuss how this situation came to be. How do competitors fight Boeing? What role does government play in this industry? How have global forces influenced the industry?

Answer 1

Ans

Boeing is still the United States only producer of large civilian jet aircraft due to following reasons they are:

1. It continuously expands its product line and services to meet emerging customer needs .

2. It continuously invest in research and development for enhanced capabilities and platforms.

3.It is a global provider of financial solutions for Boeing customers .

The competitors like Airbus fight Boeing on the basis of following grounds they are:

1. Technology.

Airbus compete with Boeing through its introduction of advanced technology .

Eg : A300 made the extensive use of composite materials and by automating the flight engineers functions , was the first widebody jet to have a two person flight crew.

2. Currency and exchange rates.

Airbus production cost are mostly in euro as comapared to Boeing who has in US dollars . Depending on the currency fluctuations between the acceptance and delivery of the order this can result in extra profit or expense .

The role of government in this industry are as follows:

1. The federal government has established a joint aviation system program office with the perception that the demand for air transportation will exceed planned capacity improvements.

2. Government support research in aviation safety , security and environmental effects and other areas where the performance of the air transportation system impacts society . The purpose is to bring advanced concepts and technologies to the point where private investment can be justified by the industry.

The various ways in which the global forces have influenced the industry are:

1. Regulatory pressures.

Their is increased awareness by industry and additional scrutiny given by FDA and other national regulatory bodies.

2. Airlines and the allocation and the maintenance cost.

Airlines is a industry with huge cost and investment where the allocation cost and the maintenance cost are major factors of the industry. Like other industries this industry is not immune to global economic downfall.