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Word Count: 360
The airplane industry is a large profit making industry world wide even with the drop in sales due to the attack of September 11th A recent article by Dow Jones Company INC dated October 14 2002 discusses the current condition of the market This oligopoly has two main producers Boeing and Airbus Boeings sales have declined since last year from 527 aircrafts to 380 1 This drop in demand has not just affected Boeing but has lowered profit for both firms For both of these companies operations have been reduced this includes service Boeing is an American company that is mainly based in Chicago 1 This company has had larger sales in the past year and has held a good portion of the market power Due to the September 11th event American airlines have scaled back on the purchase of aircraft and has lowered Boeings demand These factors have also impacted Airbus though not so drastically Airbus has been so far on schedule for production The depreciation of sales has also had an effect on other companies acquainted with these One such is General Electric which has cut employment due that they were the largest supplier of engines to Airbus and Boeing 1 These companies depend on consumer demand for the airline services With the cutting back of people traveling the sky has reduced With this reduction in demand Airbus and Boeing will start losing revenue These companies will have to target more foreign markets Airbus and Boeing will either have to raise the price for there aircrafts which is extremely difficult to do or they will have to cut back on cost Since the rivalry between these two companies is extremely strong one will try to take production from the other This is already evident with airbus which is cutting price on their product They have taken 800000 of their price 1 The fear of flying in the United
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