No Cause for Concern for Boeing Shareholders
The new Airbus jumbo jet will not hurt Boeing shares.
Airbus has decided to launch a competitive attack against Boeing's (BA) previously unchallenged monopoly in the prized jumbo-jet market. But Boeing shareholders’ need not worry.
Developing a new aircraft from scratch is an enormous undertaking requiring a vast amount of capital. It is anticipated that Airbus could spend up to $20 billion developing its new jet, dubbed the A3XX, diverting capital and engineering resources from other aircraft for a product with uncertain prospects. In fact, the jumbo-jet market has been reeling since the Asian economic collapse and has shown no signs of a strong recovery.
Richard Wilson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.