Concentration of Risk

Over the last twenty years the numbers of major aircraft manufactures have declined to two: Boeing and Airbus. Although there are several minor and emerging manufactures, including Bombardier, Embraer, COMAC and others, they currently lag far behind the major two. Both Boeing and Airbus continue to invest massive amounts of money in the development of fewer new aircraft that require decades of flawless execution before financially breaking even. These huge concentrated bets create concentrated risks. Technical problems, supply chain delays, and miscalculation of expected market demand undermines profitability along the entire supply chain.

Peter J. Friedman
Five by Five Capital, LLC