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Competition, technology innovation, and industrial structure
in the Business Aviation Industry
Mario Mustilli
Professor in Management, School of Management & Economics, Seconda Università
degli Studi di Napoli, www.economia.unina2.it, Capua (CE), Italy
mario.mustilli@unina2.it
+39 0814207154
Filomena Izzo
PhD in Management and Innovation, School of Management & Economics, Seconda
Università degli Studi di Napoli,– Capua (CE), Italy.
filomena.izzo@unina2.it,
+39 3282792625
ABSTRACT
This article aims to investigate the nature of competition and the industrial structure in the
Business Aviation Industry (BAI). The aircraft product is a typical Complex Product System
(CoPS). Recent study based the nature of the competition in the CoPS industries on the
knowledge needed to generate and develop the product. We proposed an extended approach,
including collateral assets and scale economies, to understand the drivers of competitive
advantage and the industrial structure in the BAI.
The methodology research is based on archival data (1930-2004), empirical analysis
(1994-2004) and interviews to industrial experts. We find that the BAI tends to oligopoly,
because there are high barrier to entry: collateral assets, scale economies, knowledge, and
financial resources to compete in the global CoPS industry. Finally, we demonstrated that the
product technology innovation is not a relevant force for the incumbent survival.
Our research is helpful to managers who need to devise strategy to reduce the uncertainty
about the dynamic of Business Aviation (BA) evolution market. Choosing to study the BA
market satisfies two needs: to give more insight to the Italian aeronautical industries and,
second, the scientific novelty of the analysis. In the next years, the business aviation market
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will be the most rampant sector of the aeronautical civil arena, and several Italian
aeronautical companies showed particular interest. Besides, analyzing a barely investigated
market sector represented a strong motivation as well.
INTRODUCTION
The Civil Aviation market is divided into Scheduled and Non-Scheduled Transportation.
The Scheduled Transportation consists in regularly fly activities using predetermined
airports and routes (ordinary transport). This kind of flying transportation satisfies the
economical regular demand. This market is divided into Regional and Commercial Aviation.
The Regional Aviation commutes between close and minor airports. While, Commercial
Aviation flies over national, international and intercontinental routes, connecting major
airports (Jane’s, 2005 - 2006).
The Non-Scheduled Transportation gathers all the remaining flying activities of the Civil
Aviation not considered by the Scheduled ones. In particular, the General Aviation represents
the main part of the Non-Scheduled Civil Transportation Aviation. It includes: Flight
Training, Gliding, Ballooning, Parachuting, Aerobatics, Flying Clubs, Fire Fighting, Air
Ambulance, Police Air Patron and Business aviation.
Business aviation refers to planes less 100 seats, owned by “ a corporation or (other
business organization …, powered by at least two engine, equipped to fly day, night and
instruments to transport business personnel, prospect, customers, suppliers and friends in
connection with the execution of business duties” (Aviation Week & Space Technology,
1953, p.18). About 90% of consumers use business aircraft to improve people and time
efficiency, only the remaining 10% buys a plane for different reasons: leisure and image
(Denstadli, 1998, 1999; Lian and Denstadli, 2004; Fowkes et al, 1985; TRB, 1998, 2000,
2003; Trevino et al, 1987, 1990; NBAA 2004, 2005; GAMA, 2006). Anyway, both
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typologies of costumers have the same expectations and behaviours (Honeywell, 2004).
Therefore, it is evident the Business Aviation is a global industry, because the business
aircraft is a universal product, in fact, there is a universal segment across the country.
Aircraft is a typical CoPS. The CoPS are characterized by high value engineering-based
capital goods (Hobday, 1998; Acha et al., 2004; Miller et al, 1995). They are built as projects
(Oshri and Newell, 2005) in collaboration with a sizeable number of suppliers. Hatchuel,
Saidi-Kabeche and Sardas (1997) come to many of the same conclusions about the aviation
production systems, although they do not explicitly refer to the CoPS approach. As they
suggest, “… a ‘product’ is somehow synonymous with a ‘project’.” (op cit. p. 868).
The barriers to entry into producing CoPS are very high and most, if not all, CoPSproducing industries tend toward oligopoly (Hardstone, 2004). In this paper, we examine the
nature of competition in the BAI and the industrial structure. The article is organized as
follows: in the next sections, we provide an overview about nature of competition in the
CoPS industries, present our approach and hypotheses. We, then, describe the data,
methodology, and results. We conclude by discussing the article’s contribution.
THEORY AND HYPOTHESES
Nature of competition, innovation, and industrial structure in the BAI: an extended
approach
Competition, innovation and industrial structure in CoPS industries
The dynamics of innovation and competition in CoPS industries differ from those in mass
production (Bonaccorsi, et al, 1996; Davies, 1997; Hobday, 1998). CoPS require a wide
breadth of knowledge and skills for their generation and development (Acha et al., 2004),
“They are a function of the tacit processes of knowledge” (Paoli and Prencipe, 1999, p. 143).
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Civil aviation industry is characterized by complex knowledge bases, and uncertainty in
performance. Mowery and Rosenberg (1981) emphasized this point specifically: “Central to
an understanding of the innovation process in the commercial aircraft industry is the high
degree of systemic complexity embodied in the final product. The finished commercial
aircraft comprises a wide range of components for propulsion, navigation, and so on, that are
individually extremely complex. The interaction of these individually complex systems is
crucial to the performance of an aircraft design, yet extremely difficult to predict from design
and engineering data, even with presently available computer-aided design (CAD)
techniques. (..) This pervasive technological uncertainty has been and remains an important
influence upon producer structure and conduct in the industry.” (1981, p. 348).
Eliasson (1996) discusses the same phenomenon, which he terms ‘integrated production’,
and he draws particular attention to the capabilities of the systems integrator in this process.
Complex technology may be more difficult to imitate. Most difficult to imitate, however, is
the organizational capability to integrate complex technologies through the product design,
the engineering and manufacturing processes, including also designs that minimize future
maintenance and modernization costs. Most of the knowledge is embodied in teams of people
as “empirical experience” (Eliasson, 1996, p. 130).
Prencipe categorized the capabilities of firms developing multi-technology products. The
taxonomy includes: 1) absorptive capabilities (capabilities to monitor, identify and
evaluation new opportunities emerging from general advances in science and technology); 2)
integrative capabilities (capabilities to set the requirements, specify source equipment,
materials and components designed and produced internally or externally; and integrate them
into the architectures of existing products); 3) co-ordinative capabilities (capabilities to coordinate the development of new and emerging bodies of technological knowledge); and 4)
generative capabilities (capabilities to innovate both at the component and architectural
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level) (Prencipe, 2001, pp. 305–306). In other words, these firms have to know a lot more
than they do (Brusoni, Prencipe and Pavitt, 2001; Paoli and Prencipe, 1999).
Bonaccorsi (et al., 2001) highlighted the nature of competition in CoPS industries is ability to
manage simultaneously the task of systems integration, and the pace of technological
advancement.
Therefore, the barriers to entry into producing CoPS are very high and most, if not all,
CoPS-producing industries tend toward oligopoly (Hardstone, 2004). Examples of CoPS
industries tend to oligopoly are: aero-engine industries (Miller and Sawers, 1968; Phillips,
1971; Constant, 1980; Vincenti, 1986; Garvin, 1998; Bonaccorsi et al, 2005), and commercial
aircraft industry (Acha et al, 2007; Phillips, 1971; Movery and Rosemberg, 1982; Esposito,
1996; Vicari, 1989, 1991; Parazzini, 2003).
It is evident, that the academic studies stressed the importance of the knowledge about the
nature of competition in the CoPS industries. Whereas, we extend this approach including the
specialised collateral assets and the scale economies.
Specialised complementary assets, innovation and incumbent survival
Teece (1986) highlighted the importance of specialised complementary asset (after sales
support, brand image, and customer switching costs) as a critical factor in determining who
benefits from innovation. These resources are generally valuable and difficult to imitate and
can therefore be a source of competitive advantage (Barney 1991).
Mitchell (1989) found that the possession of specialized complementary assets enhanced
the probability that incumbents in the medical diagnostic imaging industry would enter a
newly emerging subfield.
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Tripsas (1997), in her study of the typesetter industry, showed that incumbents may be
buffered from the negative effects of technological discontinuities if they possess specialized
complementary assets.
Lerner and Merges (1998) showed incumbents possess specialized complementary assets
necessary to commercialize the new technology are frequently in a stronger bargaining
position to appropriate the joint value created.
Rothaermel and Hill (2005) found that incumbent industry performance declined if the
new technology could be commercialized through generic assets, but that incumbent industry
performance improved if the new technology could be commercialized through specialized
assets.
Therefore, the academic study highlight that specialized complementary assets play a
powerful effect on incumbent position. According to these approaches, we test these
hypotheses :
Hp1t: specialized complementary assets characterize BAI competition, they represent high
barrier to entry and play a powerful effect on incumbent survival
Hp1(bis)t: technology product innovation is not a relevant force for the incumbent survival
in the BAI.
Scale economies and universal product
The aircraft is a typical universal product (Porter, 1986; Yoshino, 1988). These
characteristic gives to the firms some benefits: 1) large volume amortize fix investments; 2)
standardization of product 3) concentrating value-adding activities in a few countries; 4)
adopting a uniform market positioning and marketing mix. In this industry, firm gains scale
or learning curve advantage (ibidem). In the market of scale economies, the focus of
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competition is based on lower cost and differentiation via minor design variations and
strategic positioning tactics (Porter, 1985).
In our research, we verified the importance of scale economies, and the strategies of
firm’s product portfolio. We test following hypothesis:
Hp2t: business aircraft is a universal product, so scale economies represent high barrier to
entry in the BAI.
Hp2 (bis)t: there are no technology product innovation in the BAI, the incumbents focus
competition on differentiation via minor design variations and strategic positioning
tactics.
We proposed an extended approach to understand the nature of competition and the industrial
structure in the BAI. We expect that the BAI tend to oligopoly because there are high barrier
to entry: management of CoPS, specialized complementary assets and scale economies.
Hp3t: BAI tends to oligopoly because there are high barrier to entry: management of
CoPS, specialized complementary assets and scale economies.
DATA AND METHODOLOGY
To test our hypothesis we adopt both qualitative and quantitative approach. We propose
an integrated analysis of industrial and technology competition (1994-2004), historical data
(1930-2004) and interviews to industrial experts (Italian Aerospace Research Center
Marketing Director, Piaggio Aero Industries Marketing Director, Alenia Industries Marketing
Director, Italian Business Aviation Association President, European Business Aviation
Association President).
BAI is divided in Turboprop and Jet market. Historically, the Business Jet market is
composed by four classes: Light, Medium, Large, and Long range; whereas Turboprop
market is divided in three classes: Light, Medium and Heavy.
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We used several sources for the historical data: Acts of American Institute of Astronautics
Convention (2003); specialized magazines such as Business Jet, Flight International,
Aviation Week & Space Technologies, Volare; Organizations’ web sites; Companies’ reports;
Business Jet industry historical documentation (Phillips, 1994, 1971).
Quantitative data were derived from several specialized sources: Jane’s All the World
Aircrafts, General Aviation Manufacturing Association reports, National Business American
Association, European Business Aviation Association reports; Companies’ web sites.
Technology competition, product portfolio strategy and scale economies
Grupp Index
The evaluation of technological progress and companies’ technological position is a wellknown problem. It has been approached in several different ways. In the neoclassical
approach, the concept of technical progress was introduced through measures of productivity,
which are very indirect measures of technological attributes of products. A wide literature has
used patents as indicators of the level of the inventive activities of firms, industries and
countries, and of different aspects of the firms’ technological strategies (i.e. technological
diversification, protection from imitation, licensing). While recognising the prominent role
that patents play in the research on innovation strategies, we share the view of study of
technology competition that identify a product, which is composed of a number of
characteristics evolving over time, as relevant unit of analysis (Lancaster, 1971; Saviotti and
Metcalfe, 1984; Sahal, 1985a; Trajtenberg, 1990; Grupp, 1998). Innovation on products
occurs by the improvement (change in the type or value) of their technical characteristic, or
by the introduction of new characteristics. The level of the technological characteristics
incorporated in the product represent an output of the firms’ technological strategy, which
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does not reveal information about the firms’ R&D investment or whether the company makes
or buys the technologies.
The emphasis on the characteristics of the products has been introduced within the
characteristic approach and the Hedonic price method (Griliches, 1971; Lancaster, 1971), in
which it has developed the idea that products are a bundle of characteristics and that
consumers choose characteristics instead of products. Therefore, the arguments of the utility
functions are the characteristics and not the products. Within this approach, the benefit of the
characteristics for the consumers are detected through regression models measuring the
contribution of the technical characteristics to the formation of the product prices. On this
basis, Trajtenberg (1990) developed a model for studying the product innovation in the CT
scanners industry. However, the use of the price for estimating the weight of the
characteristics presents some difficulties: the approach is based on the assumption that the
market is competitive, but in a number of industries the price is not determined by the free
interplay of supply and demand (Sahal, 1985b); data on prices are not always publicly
disclosed, and even in the case in which price lists are available, the price of a specific
product can change over time (e.g. because of cost reductions) determining uncertainty in the
selection of data. Moreover, the use of economic variables in the evaluation of technical
attributes does not allow the ‘pure’ measurement of technology advance (Saviotti and
Metcalfe, 1984).
Saviotti and Metcalfe (1984) described a product by technical and service characteristics
and by the mapping between the two. More recent contributions use measures of diversity
(entropy measure, Weitzman’s measure) using data on technical and service characteristics to
measure the emergence of new product niches as an indicator of the technical progress
(Saviotti, 1996; Frenken et al., 1999, 2000). Anyway, these measures allow the identification
of dominant designs and product differentiation at the industry level, but are not used to
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detect technological positions of actors. Several contributions have developed technometric
measures based on various multidimensional functions that link technical characteristics in
order to analyse the rate of technological progress (Dodson, 1985; Martino, 1985; Sahal,
1985a), but most of them do not address the analysis of technological competition among
actors.
A simple technometric indicator was proposed by Grupp (1998). It measures directly the
technical progress. Each product in a market segment is represented by a k-tuple of technical
characteristics at time t which is compared with other k-tuples for other products. The
advantages of a technometric indicator are the following: it is dimensionless, it is observable
over a period of time for detecting technical progress, it allows the identification of brands
and firms for the analysis of technological positions of actors. Another advantage that comes
from the use of technical characteristics of products with respect to other measures of
innovation such as patents, is that they allow the identification of technological trajectories
and their evolution over time through indicators of output of the innovative activity, which is
directly related to the product and not only to the firms’ technological competencies. The
main problem of this indicator is related to the aggregation of the indexes for each
characteristic at the firm or at the product/brand level and the consideration of trade-offs
among characteristics. Because the index is dimensionless, weighted averages of the indexes
could be a solution. A careful process in the determination of the weights and trade-offs is
necessary for reducing the subjectivity of the analysis. In this paper, we use range, speed and
cabin-size as primary technological parameters of the business aircraft. Our choice validated
by several experts and found its confirmation in market researches (Honeywell, 2006).
(1)
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Ktmax jk
ISBN : 978-0-9742114-5-9
the maximum value of k for the company j, at the time t, among all its
products.
Kt+1min k the minimum value of k at the time t+1 in the market.
Kt-1max k is the maximum value of k at the time t-1 in the market.
The meaning of the Grupp Index T can be interpreted as follows:
T = 0  the company is positioned on the previous technological lowest limit;
T = 1  the company is positioned on the previous technological upper frontier;
T >1  the company has improved on the previous technological upper frontier;
T <1 the company results positioned below the previous technological lowest limit.
New product introduction
A useful indicator to know the technology innovation intensity and the competitors’
product strategy in the industries history is the introduction of new models of product. An
aircraft product is based on program. The programme is based on "core" technology platform,
whereas aircraft versions are developed on the same programme through the modification of
few characteristics (Frigant and Talbot, 2005). It is clear, therefore, that the innovations
contained in different product versions are incremental, while radical innovation occurs with
the introduction of a new programme. The data collected (Janes' 2005-2006) differentiates
each year the launch of new product versions to add of new programme.
Other information comes from the introduction of new products is on the existence of
scale economies. Of course, data on the costs of development would be more appropriate to
estimate the existence of scale economies resulting from the production of different versions
and aircraft programs, but these data are hardly made public by companies. An indirect
measure of scale economies is provided by data on programs and versions of products. In the
design and production of aircraft, in fact, an effective way to exploit scale economies is to use
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the same program as a basis for the development of a family of products. In literature, many
authors are based on measures reach product family as an indication of existence of scale
economies (Sutton, 1998; Monwery and Rosenberg, 1982; Rothwell and Gardiner 1989,
1990; Giuri, 2003).
Industrial competition
In order to study the industry’s concentration we used Herfindahl Index (Grossack, 1965;
Boyle e Sorensen, 1971; Curry e Gorge, 1983). It is the summation of the squared companies’
shares in the evaluated market. To determine the companies’ market shares, we considered
the number of the sold aircrafts. This approach might be considered not perfectly correct.
Nevertheless, it is matter of fact that the aircrafts’ price is information not always available as
well as reliable. This forced us to focus on the number of aircrafts rather than the companies’
turnover.
The Herfindahl index assumes value between 0 and 1. A lower value indicates a market
less concentrated; instead, a value closer to 1 denotes a market structure high concentrated. In
a market with few actors, a low index gives a raw indication of the competition; in fact, in an
oligopoly situation a low index means that no one is able to prevail on others.
(2)
Knowing every single company’s share deviations is an important indicator of the
competition intensity (Joskow, 1960; Geroski e Toker, 1996). Therefore, the joint
investigation of the market concentration and the market mobility gives better evidence for a
thorough quantitative and qualitative analysis.
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In order to study the market shares mobility, we used Pashig Index (Baldwin, 1995). It
assumes value between 0 and 1. Its value close to 1 indicates a high intensity of the
competition, so, the higher instability of the market shares.
(3)
PASHIG =
RESULTS
Business Turboprop market
The first aircrafts destined to Business Aviation were turboprops (1930-1950). The
incumbents in the turboprop market were Cessna and Beechcraft and remained the same until
2004 (figure 2). There was only one relevant entrant in the Business turboprop market:
Pilatus (figure 2). The experts highlighted that Pilatus’ attempt was supported by a
competitive product in terms of technological performance and price, and excellent customer
support. Herfindahl index (figure 4) showed no one is able to prevail on others, in addition
Pashig index (figure 3) confirmed the higher stability of the market shares.
The product portfolio strategy of incumbents were stable, in fact in the 1994-2004 they
didn’t launch new product (table 3-6) profiting by scale economies. Index Grupp (table 5)
confirmed that there were no technology innovations by incumbents; in addition, the new
entrants – Piaggio - (table 3) with an innovative product (table 5) didn’t achieve market
success (figure 2), because there were high barrier to entry in the market: high brand loyalty,
excellent customer support, and high switching cost.
Business Jet market
The post-war period saw the affirmation of jet technology. The first mover in the Business
jet market was Lockheed and North America Aviation (1950s-1960s), but they didn’t have
success (table 1). The principal reasons of failure were technological and market uncertainty.
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The late entrants Dassault (in the Large Jet segment), Learjet (in the Medium Jet segment),
and Gulfstream (in the Long Range Jet segment) had success. During the following years,
attempts to penetrate the business jet market were numerous, but most of them turned out to
be failures, for example: the Isreaely Aircraft Industry (IAI), the German Hamburger
Flugzeugbau, Mitsubishi, and Piaggio (table 1).
These failures were characterized by common elements: 1) inadequate distribution
network and customer support; 2) supply of products with characteristics similar or slightly
higher than those already existing on the market; 3) product portfolio smaller than market
leaders; 4) leaders’ brand loyalty; 5) high customer switching costs. Only Cessna and
Raytheon succeeded to enter in the jet segment, because they enjoyed excellent reputation in
the business turboprop market.
In 1971 Cessna opened the lower end of the market: Light business jet segment. Cessna’s
decision was a very risky one. Other companies before Cessna tried in the same experiment
but none had success, like as MS-760, Lear Jet-23, Italian Cobra F-400, IAI B-301C, Heinkel
Potez CM-191, Saab 105, Macchi MB-330, HA 230. Cessna’s success depended by different
factors: 1) cheapness of aircraft (purchase price, maintenance and operating costs were low;
2) ease of use of the machine; 3) extensive network of customer service centres; 4) strong
image and high brand loyalty gained in the turboprop market; 5) excellent customer service
(for example, the company offered free training courses for the management and piloting of
its aircraft); 6) wide portfolio of products; 7) belonging to the Industrial Group (table 2)
which guaranteed access to knowledge and economic resources. Only Raytheon was able to
penetrate the Light jet segment, because the company enjoyed a strong reputation and brand
loyalty won in the Business Turboprop market.
Until the beginning of the 1990s, the incumbent remained the same (figure 1):
Bombardier, Cessna, Dassault, Gulfstream and Raytheon. The market tends to oligopoly
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(figure 1), in fact Herfindahl index (figure 4) showed no one is able to prevail on others.
Pashig index (figure 3) confirmed these, showing the higher stability of the market shares.
Index Grupp (table 5) showed there were no technology innovations by the incumbents.
Moreover, the study on number of versions and programs (table 6) confirms that main
competitors extended their product portfolio, penetrating other segments (table 4) and using
the same program. It is clear, therefore, the existence of scale economies in the industry.
DISCUSSION AND CONCLUSION
Our analysis highlights the existence and survival the dominant market position in the
BAI. The incumbents are the same from more than 30 years. We demonstrate that there are
no technology and industrial competition in the BAI. In fact, we find:
a)
specialized complementary assets (brand loyalty, swiching cost, customer support)
characterize historically BAI competition, they are high barrier to entry in the
market, and play a powerful effect on incumbent survival, in fact, there are not
relevant new entry (Hp1t is confirmed);
b)
technology product innovation is not a relevant force for incumbent survival, in
fact the Grupp index show there are not innovation by incumbents in the 19942004 (Hp1(bis)t is confirmed);
c)
the study on programs/versions of products and the market share highlights the
existence of scale economy in the BAI (Hp2t is confirmed); in fact, the incumbents
extended their product portfolio, penetrating other segments and using the same
program (Hp2 (bis)t is confirmed);
d)
all incumbents belonging to Industrial Group, which had assured the access to
skill, knowledge and financial resources needed to generate and develop aircraft
product.
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Therefore, our study highlight that the BAI tends to oligopoly because there are high barrier
to entry: management of CoPS, specialized complementary assets and scale economies (Hp3t
is confirmed).
Managerial contributions
Our research is helpful for manager who need to devise strategy that reduce the uncertainty
about the dynamic of BA evolution market. It suggests the probability of successful entry into
BAI greatly depends on having different factor: collateral assets, scale economies, knowledge
and financial resources to compete in the global CoPS industry.
Acknowledgements
The authors are grateful for the support received by Italian Aerospace Research Center
Marketing Director, Piaggio Aero Industries Marketing Director, Alenia Industries Marketing
Director, Italian Business Aviation Association President, European Business Aviation
Association President.
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Table 1: Business Jet market share historical data, 1961-1991
Product/
Manufacturer/
(jet segment)
1960
1961 1962-1964 1965-1967 1968-1970 1971-1973 1974-1976 1977-1979 1980-1982 1983-1985 1986-1988 1989-1991
North American
100,0%
Aviation
(Medium segment)
71,7%
82,1%
14,8%
12,0%
11,6%
13,9%
6,4%
6,4%
-
-
-
Lockheed
(Medium segment)
-
28,3%
14,6%
10,8%
6,1%
5,6%
0,6%
3,8%
-
-
-
-
Learjet/
Bombardier
(Medium segment)
-
-
1,4%
25,6%
29,0%
20,6%
27,2%
30,8%
23,8%
15,5%
4,6%
6,4%
Aero Commander,
IAI
(Medium segment)
-
-
0,5%
20,3%
5,0%
5,1%
4,2%
8,2%
8,0%
7,8%
6,2%
5,5%
Hawker/Raytheon
(Light and
Medium segment)
-
-
1,4%
11,8%
12,7%
6,5%
4,2%
7,1%
5,8%
7,4%
12,7%
8,3%
Dassault
(Large Segment)
-
-
-
16,3%
12,0%
13,8%
15,0%
10,3%
10,4%
10,2%
15,7%
7,5%
Gulfstream (Long
Range segment)
-
-
-
0,3%
21,0%
10,5%
6,9%
5,8%
5,1%
9,4%
16,8%
15,0%
Hamburger
Flugzeugbau
(Medium jet)
-
-
-
-
2,1%
1,1%
-
-
-
-
-
-
Cessna
(Light segment, )
-
-
-
-
-
25,1%
27,9%
27,6%
33,8%
33,1%
29,7%
40,7%
Canadair/
Bombardier
(Heavy segment)
-
-
-
-
-
-
-
-
4,5%
7,7%
6,9%
10,8%
Beechcraft/
Raytheon
(Medium segment)
-
-
-
-
-
-
-
-
2,2%
8,8%
7,3%
5,8%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
100,0%
212
508
424
354
519
720
1013
625
434
361
Total %
Total number of
Business Jets
100,0% 100,0%
15
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Table 2: Industrial group by incumbent manufacturer
INDUSTRIAL GROUP
BUSINESS
BRAND
Elicopter
Aircraft
Bell
Cessna (Piston, turboprop, BJ)
E-Z-GO
Jacobsen
Kautex
Greenlee
Textron Fluid & Power
Raytheon
Textron
Industrial
Missile Defence
Intelligence, surveillance
and reconnassance
Raytheon
Precision engagement
Homeland Security
Aircraft
General Dynamics
Dassault
Information System and
Technology
Combat Systems
Marine
Resources
Business Jet
Press
Avioncs, structure
Raytheon
Raytheon
Hawker (BJ)
Beechcraft (BJ)
King Air (Turboprop)
General Dynamics
General Dynamics
General Dynamics
General Dynamics
Gulfstream
Socpress
S.A.B.C.A.
Industrial
Société de Véhicules Electriques
Aerospace
Sistem
Dassault
Dassault Systèmes
C series (commercial aviation)
CRJ series (regional aviation)
Learjet (BJ)
Challenger (BJ)
Global (BJ)
Bombardier Amphibious
Bombardier (military)
Bombardier
Bombardier
Bombardier
Bombardier
Bombardier
Bombardier
Aerospace
Bombardier
Rail vehicles
Transit Systems
Propulsion and Controls
Transport Services
RailControl Solution
Bogies
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Raytheon
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Figure 1: Business jet, manufacturer market share (unit) by manufacturer, 1994-2004
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
1994
1995
1996
AvCraft
Embraer
1997
1998
1999
Bombardier
Gulfstream
2000
2001
2002
Cessna
Raytheon
2003
2004
Dassault
Figure 2: Business turboprop, manufacturer market share (unit) manufacturer, 19942004
60%
50%
40%
30%
20%
10%
0%
1994
Cessna
Pilatus
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Florence, Italy
1995
1996
1997
1998
1999
Maule Air Inc.
Raytheon
2000
2001
Pacific Aerospace
Socata
19
2002
2003
Piaggio
New Piper
2004
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Table 3: Business turboprop, product portfolio by manufacturer, 1994-2004
CLASS
MANUFACTURER
MODEL
Heavy
PILATUS
PC-12
Heavy
RAYTHEON
KINGAIR 200
Heavy
RAYTHEON
KINGAIR 350
Heavy
PIAGGIO
P180 Avanti
Light
Maule Air Inc.
MT-7-420
Light
SOCATA
TBM 700
Light
NEW PIPER
Meridian
Light
Pacific Aerospace
PAC 750XL
Medium
CESSNA
CARAVAN
Medium
CESSNA
GRAND CARAVAN
Medium
RAYTHEON
KINGAIR 90
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Table 4: Business jet, product portfolio by manufacturer, 1994-2004
CLASS
LIGHT
LIGHT
LIGHT
LIGHT
LIGHT
LIGHT
LIGHT
LIGHT
LIGHT
LIGHT
LIGHT
LIGHT
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
MEDIUM
LARGE
LARGE
LARGE
LARGE
LARGE
LARGE
LONG RANGE
LONG RANGE
LONG RANGE
LONG RANGE
LONG RANGE
LONG RANGE
LONG RANGE
LONG RANGE
MANUFACTURER-MODEL
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Cessna - Citation II
Cessna - Citation V
Cessna - CJ 1
Bombardier - Learjet 31A
Raytheon - Hawker 400 XP
Cessna - Citation Ultra
Cessna - Citation Bravo
Cessna - CJ 2
Cessna - Citation Encore
Raytheon - Premier I
Bombardier - Learjet 40
Cessna - CJ 3
Cessna - Citation VI
Raytheon - Hawker 800
Dassault - Falcon 50
Raytheon - Hawker 1000
Cessna - Citation VII
Gulfstream - G 100
Bombardier - Learjet 60
Bombardier - Learjet 45 XR
Cessna - Citation X
Raytheon - Hawker 800 XP
Dassault - Falcon 50 EX
Bombardier - Learjet 45
Cessna - Citation Excel
Gulfstream - G 200
AvCraft - Envoy 3
Bombardier - Challenger 300
Cessna - Citation Sovereign
Cessna - Citation XLS
Bombardier - Challenger 601
Dassault - Falcon 2000 EX
Dassault - Falcon 2000
Bombardier - Challenger 604
Embraer - Legacy Executive
Dassault - Falcon 2000 EX Easy
Dassault - Falcon 900 B
Gulfstream - G 400
Dassault - Falcon 900 EX
Gulfstream - G 500
Bombardier - Global Express
Dassault - Falcon 900 C
Dassault - Falcon 900 EX Easy
Bombardier - Global 5000
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Figure 3: Pashig index by industry 1994 - 2004
1,00
0,90
0,80
0,70
0,60
0,50
0,40
0,30
0,20
0,10
0,00
1995
1996
1997
1998
1999
Jet
2000
2001
2002
2003
2004
2003
2004
Turboprop
Figure 4: Herfindahl index by industry 1994 - 2004
1,00
0,90
0,80
0,70
0,60
0,50
0,40
0,30
0,20
0,10
0,00
1994
1995
1996
1997
1998
1999
Jet
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2000
2001
Turboprop
21
2002
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Table 5: Grupp index by manufacturer 1994 - 2004
Manufacturer
Speed
Payload
JET MARKET
AvCraft
0,13
1,00
Bombardier
0,74
0,23
Cessna
1,00
0,16
Dassault
0,69
0,86
Gulfstream
0,78
0,47
Raytheon
0,52
0,12
Embraer
0,46
0,28
TURBOPROP MARKET
Cessna
0,17
0,80
0,00
0,00
Maule Air Inc.
-0,02
0,48
Pacific Aerospace
1,40
0,93
Piaggio
0,85
0,77
Pilatus
1,00
1,00
Raytheon
0,72
0,01
Socata
0,76
0,22
New Piper
Range
0,08
0,86
0,44
0,54
1,00
0,19
0,40
0,00
-0,32
-0,30
0,63
1,00
0,67
0,07
0,05
Table 6: Number of programs and version index by manufacturer, 1994 - 2004
Manufacturer
Cessna
Bombardier
Raytheon
Gulfstream
Dassault
Cessna
Raytheon
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programs
BUSINESS JET
1
1
1
1
1
BUSINESS TURBOPROP
1
1
22
versions
14
9
5
4
9
2
3
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