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The worldwide market for commercial jet aircraft is primarily dependent on long-term trends in airline passenger traffic And this trend can be explained by factors such as economic growth in developed and emerging markets along with political stability First there are limitations in air transport infrastructure such as government and environmental regulations and air traffic control Second because demand for aircraft is highly volatile long run planning becomes difficult and raises the risks involved in producing aircrafts The commercial airline industry is prone to boom and bust cycles During the early 1990s many major airlines experienced financial trouble Pan Am Continental and Eastern were all either in Chapter 11 or had recently folded Many other airlines were losing money In response airlines slowed their ordering of new aircraft pushed backed delivery dates for aircraft on firm order and decided not to convert their options on future aircraft de liveries on firm orders The globalization and consolidation of the industry causes increased competition as well Even though there are very few players the intense competition and very high capital requirements drive the need to maximize volume and tap all possible markets It is unthinkable to have a national or regional strategy and expect to succeed in the industry At the present time the aircraft industry is dominated by two global players Boeing and Airbus and their rivalry is in many ways representative of two seemingly incompatible as well as totally opposing market philosophies Boeing is the free market champion while Airbus represents the not so free approach of the European Unions organized and government subsidized competition in the so-called strategic markets For years however the commercial aircraft industry has been an American success story Until 1980 US manufacturers held a virtual monopoly In recent years however US dominance has been threatened by the rise of Airbus Industrie a consortium of four European aircraft manufacturers Since 1981 Airbus has emerged as the worlds second-largest aircraft manufacturer
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