This week we have seen two good sources discussing how Airbus is likely to respond to a potential new Boeing.  The Reuters story is here and the CNN story is here.   Both these stories lay out clearly how the two OEMs are working through this process to outwit each other.  This is the game theory at work with serious, big money, stakes.  What will be powering these aircraft is the place to be watching.

What is less discussed at this early stage is that there are no engines that can power these two aircraft.  But all three western engine makers are going to chase these two aircraft programs.   The stakes are big for them, too.  Winning a spot on one or both programs provides the payback on high-cost R&D.  It also means staying in the business.  Failure to win a spot can be a disaster.  Consequently, the knives will be razor sharp and the fight will be brutal.  Nobody will give, or expect any quarter.

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