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Monday, October 09, 2006

Airbus, bankruptcy, and monopoly

The Economist has a story about the daunting problems facing Airbus. As usual the magazine is informative, but for one bit of idiocy:
More alarmist analysts think that doing nothing would kill the company and make Boeing a monopoly producer.
Let's say Airbus/EADS goes bankrupt. Boeing will not be a monopoly producer, because Airbus will continue. Its investors will lose their shirts, its factories and other assets will simply be picked up by other investors.

Even in a make-believe world where bankruptcy led to assets going *poof* Boeing would only have a temporary monopoly position in a part of the market for large airliners. Bombadier and Embraer would develop larger airframes, Ilyushin would have a viable market position and one or more Asian companies would see an opening and act.

The only concern Kitchen Linker has is that these companies may be behind Boeing and Airbus in producing efficient aircraft. And that is a major concern.

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