Insight: The growing Middle of Market segment and a more unstable duopoly

Several times we have put out notes about the MoM segment. In every case, we noted the strength at Airbus and the weakness at Boeing. The issue is getting worse and, by all appearances, the Boeing situation is getting worse.  This is deeply troubling. Not because we have a horse in the race – we don’t.  The reason for concern is quite simply that for a duopoly to function there has to be a balance. Once a duopoly goes unstable, the risk for both firms rises grows.  In the case of Airbus and Boeing, such a growing risk will probably destabilize most of the world’s commercial aviation.  

The pandemic provided clear evidence of the crucial role played by commercial aviation in global economic stability, moving vaccines when it could not move people.  Even then, many aircraft were parked and tens of thousands of highly skilled people lost their jobs.  No, as we emerge from the pandemic, airlines are struggling to restaff.  Commercial aviation is a finely balanced system that suffers shocks regularly.  But an unstable duopoly would be a new level of shock not seen before.