Research On Entry Barriers And Competitive Behaviors Of Civil Aircraft Manufacturing Industry

After the Yun Ten project,the C919 aircraft once again hits the civil aircraft manufacturing industry.In order to help COMAC become a globally competitive aircraft manufacturer,it is necessary to study which industry barriers exist and how to overcome them.Meanwhile,we need to understand the impact of COMAC's entry on the incumbent's strategy and supply chain network,thus providing a decision-making basis for our government,aircraft manufacturer and suppliers.This thesis uses classical economic analysis and non-cooperative game theory as tools to study the entry barriers and strategies of aviation manufacturers.It establishes a complete information static game model before entering and a dynamic game model after entering,which helps to analyze the differential competitive behaviors throughout the entry.Afterwards,it introduces the concept of discount rate,life of production line,learning effects and etc.As a result,the single-stage game model was transformed into a multi-period game model.It also measures the impact of entry on suppliers under two types of relationships.This thesis draws the following conclusions.There are two types of barriers in the aviation industry: structural and strategic barriers.In order to cross the barriers,COMAC should rely on the domestic market,improve the production system of the main manufacturer combined by suppliers,and deliver the aircrafts as soon as possible.The government should sign a multilateral agreement on airworthiness and mutual recognition and provide reasonable policy supports and financing channels to COMAC.The production decision between manufacturers mainly rely on their relative production efficiency.Meanwhile,the learning effect allows the players to make the production decisions below the cost curve.The entry of COMAC will lead to an increase in total social output and a decline in market price,which is more challenging for incumbents with lower production efficiency.The government can increase commercial production and market share through interest-free loans and subsidies,but it needs to consider the balance between subsidy spending and increased profit.The entry of COMAC has a different impact on suppliers: for vertical-split suppliers,they welcome the expansion of downstream manufacturers and share the incremental demand brought by new manufacturers.But vertically integrated suppliers will resist new entry.