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Essay text:
With 1,445 planes order backlog and "fly-by-wire" technology catching up, Airbus estimated it would break even with 250 VLA plane sales and would have 100 firm orders by the end of 2001. As of early 2002, Airbus had 97 orders + 41 options for the A380 strengthening its resolve to build the superjumbo.
2. Game theory and models of strategic product introduction:
Key deductions by modeling competition in terms of a standard Hotelling-type model of spatial competition are:
a. With two product locations (Airbus superjumbo vs. Boeing superjumbo):
The desire to protect a stream of quasi-rents (747) by Boeing, may make preemption profitable, but is not sufficient by itself, to ensure that preemption will occur...
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