The Airplane Duopoly

        99% of large plane (140-400 seats, 3,500-8,000 miles) orders are either placed with Boeing or Airbus. Meanwhile, the "Regional" jets (40-90 seats) market is also dominated by two companies: Bombardier and Embraer. There was relatively little overlap between these two duopolies so they had cooperatively coexisted until airlines started becoming interested in planes with 100-150 people.
         Bombardier, a Canadian airline, at a cost of $6 billion, built a C-series plane to meet this demand. When United announced an interest in this plane, Boeing quickly stepped in and offered there smallest 737 series for a bargain at $22 million, to prevent Bombardier from getting a foothold in their market. Then, when Bombardier responded by selling their planes even cheaper to Delta, with Boeing claiming it was less than $20 million. Boeing then filed a complaint with the U.S. Commerce Department alleging that Bombardier was "dumping" their planes in the U.S. market and selling them for less than production costs. Washington eventually agreed with Boeing and imposed a 300% tariff on the foreign, Bombardier planes.
           This is why it is so hard for companies to break into the airplane building business: planes are expensive to make and the established companies are adept and willing to use everything they can to edge out manufacturers who try to steal their business.
            However, in this case, Airbus offered an alliance Bombardier, in which Airbus would sell and service the new airplane because its production was already set up in Alaska meaning that the planes wouldn't be subject to the tariff. This caused Boeing's plan to backfire because now their main competitor, Airbus was benefitting from these new planes, and has forced Boeing into serious talks with Embraer about acquiring their commercial aircraft divisions. If anti-trust regulators approve, we could wind up with a "super duopoly" in the airline industry.