Airbus, Boeing and India's Giant Plane Orders

Why two companies dominate the manufacture of large passenger jets, what India's record aircraft orders mean, and the effects of production delays.

Almost every large passenger jet flying today was made by one of two companies: Airbus of Europe or Boeing of the United States. This is a classic duopoly.

Why only two?

Huge development costs: designing a new aircraft costs billions of dollars and takes many years.
Economies of scale and learning curves: costs fall as more planes are built.
Certification: new aircraft must pass rigorous safety approvals.
Customer loyalty: airlines prefer aircraft that fit their existing fleets.

These barriers make entry extremely hard. China’s COMAC is trying to break in with its C919 jet, mainly for Chinese airlines.

India’s giant orders

In 2023, Indian airlines placed two of the largest aircraft orders in aviation history:

Air India ordered 470 aircraft from Airbus and Boeing in February 2023.
IndiGo ordered 500 Airbus A320-family jets in June 2023.

These orders reflect expectations of strong long-term growth in Indian air travel.

Why order so many

Discounts: large orders earn big discounts off list prices.
Production slots: aircraft makers have long waiting lists, so airlines reserve delivery slots years ahead.
Growth plans: airlines want capacity to capture India’s growth.

Supply problems

Both manufacturers faced production delays, and Boeing faced safety and quality crises, such as the 737 MAX grounding after crashes in 2018 and 2019. Engine problems, especially with some Pratt & Whitney engines, grounded many planes globally. For Indian airlines, delayed deliveries and grounded aircraft limited growth and raised costs.

Industrial policy

India hopes to build more of the aviation supply chain at home. Airbus and Tata are assembling C295 military transport aircraft in India, and aircraft makers source more components from Indian suppliers.

The waiting list

An airline wants ten new planes next year, but the manufacturer's production slots are booked for years. Only airlines that ordered long ago get planes soon. This is why airlines place huge orders far in advance.

Thinking aircraft makers compete like car companies

With only two major makers and enormous entry barriers, the large jet market is a duopoly with long waiting lists.

Key takeaways

Airbus and Boeing form a duopoly in large passenger jets.
High development costs, scale economies and certification create barriers.
Air India (470) and IndiGo (500) placed record orders in 2023.
Production delays and engine problems have limited airline growth.