BOEING AIRCRAFT

Boeing Commercial Aircraft



Boeing Commercial Aircraft

A ) Are there areas where Boeing and Airbus can cooperate?

Customers play a large role in the success of both Airbus and Boeing's profitability in the aircraft market. The link among today's prices and future market share produces a trade-off between current and future profits. Airbus can respond to a temporary exchange-rate shock by raising prices to maximize current profits. This, however, tends to lower future profits, because high prices today reduce future market share and/or lead to higher future production costs. Alternatively, Airbus can give up current profit by keeping prices lower (John, 2008). ...