Daily Insight – Tuesday January 29, 2019 – From duopoly to cartel with a commodity product

News

As Airbus absorbs the C Series and Boeing starts to absorb the E-Jet, we will move from a duopoly to a cartel.  Both Airbus and Boeing are even buying up parts of the supply chain.  Rather than depend exclusively on third parties, we see the two big OEMs de-risk their supply chain by owning more of it.

Analysis

A duopoly is where there are two sellers.  A cartel is defined as a coalition of political or special-interest groups having a common cause.  A cartel is somewhat more sinister than a duopoly.  It appears to us that Airbus and Boeing are moving away from a duopoly and making progress to developing into a cartel.