Explain why the wide-bodied segment of the large commercial jet aircraft industry can only profitably support two players are present. What are the implications of your answers for barriers to entry into this segment?. Management

The wide-bodied segment of the large commercial jet aircraft industry can be only profitable for Boeing and Airbus due to the extremely high entry barriers reinforced by substantial economies of scale, absolute cost advantage, high customer switching costs and absolute cost advantage. The costs and risks of entering the wide-bodied segment industry are so high that no other company can afford competing with Boeing and Airbus. Simply put, only these two aircraft producers have resources to develop and bring new wide-bodied jests into the market. In addition, the demand for the products needs to be high so that the companies can see profit-making opportunities in developing new aircraft. In fact, it may take 10 years for Boeing to break even on their latest Boeing 787. Provided that the demand for Boeing is much higher than for its competitors (excluding Airbus), it would take Comac or Bombardier even longer to make any profit on the investment. These high entry barriers effectively keep potential competitor out of the large commercial aircraft segment.