Summary

• Invest in aerospace suppliers benefiting from the Boeing and Airbus duopoly's sustained demand.
• Gain diversified exposure to aviation growth while reducing single-manufacturer investment risk.
• Massive order backlogs and global travel recovery fuel long-term growth for the entire supply chain.
• Suppliers are critical to production increases, driving innovation in engines, avionics, and materials.

Beyond the Cockpit: Why Aircraft Suppliers Could Offer an Interesting Route

Let's be honest, we all love a good corporate dust-up. And for decades, the heavyweight title fight of the skies has been Boeing versus Airbus. It’s a fantastic story, full of drama, innovation, and the occasional public relations disaster. We watch their delivery numbers like sports scores, picking a side and cheering them on. But here’s a thought. What if backing the winner is the wrong game entirely? What if the smart play is to invest in the people selling the gloves, the shorts, and the corner stools to both fighters?

To me, the most compelling story in aviation isn't about which giant wins a particular quarter. It’s about the vast, intricate, and hugely profitable network of companies that keep both of them in business.

The Two-Horse Race That Feeds an Entire Stable

Boeing and Airbus have the commercial aircraft market sewn up. Between them, they account for something like 90 percent of all orders. It’s a classic duopoly, a cosy arrangement that ensures intense, yet predictable, competition. When one of them stumbles, the other is right there to pick up the slack. This creates a wonderfully stable bedrock of demand, not for them, but for their suppliers.

Think about it. Every single time an A320 or a 787 rolls off the assembly line, it’s a victory for hundreds of other companies. These are the firms that build the engines, the landing gear, the avionics, and the countless other components that are far too complex for Boeing or Airbus to make themselves. Many of these suppliers, quite shrewdly, provide their wares to both sides. They simply don’t care whose logo is on the tail fin, as long as the production lines keep moving.

A Backlog That’s Anything But Backwards

And my, will those lines keep moving. Both manufacturers are sitting on order backlogs that are, frankly, obscene. We’re talking about hundreds of billions of pounds worth of aircraft, representing years, even a decade in some cases, of guaranteed work. This isn’t some flimsy projection cooked up by an over-caffeinated analyst. This is a queue of global airlines, chequebooks in hand, desperate for new planes to meet recovering travel demand and replace their older, thirstier jets.

This backlog is the lifeblood of the entire supply chain. It means a company making jet engines or flight control systems today has a reasonably clear view of its order book well into the next decade. How many industries can offer that kind of forward visibility? It’s a powerful dynamic that insulates these suppliers from the short-term dramas that so often buffet the headline manufacturers.

Investing in the Ecosystem, Not Just the Ego

So, how does an investor approach this? You could spend ages trying to pick the perfect engine maker or the most innovative seating company, but I think that misses the bigger picture. The real opportunity, to me, lies in viewing this as a single, powerful theme. It’s about investing in the fundamental principle of Powering The Aerospace Duopoly. By focusing on the suppliers as a group, you’re not betting on a single horse. You’re betting on the race itself, which seems far more sensible.

Of course, it’s not a risk-free ride. Nothing in investing ever is. A sharp economic downturn could see travel demand dip, and geopolitical squabbles can always throw a spanner in the works. But the long-term trends appear rather compelling. The global middle class continues to grow, and with it, the desire to travel. This creates a virtuous cycle. More passengers mean more planes, and more planes mean more business for the companies that supply the critical parts. It’s a beautifully simple, if often overlooked, part of the investment landscape.

Deep Dive

Market & Opportunity

• Boeing and Airbus control approximately 90% of global large commercial aircraft orders, creating a duopoly.
• Analysis from Nemo shows sustained production demand for suppliers, driven by massive order backlogs.
• Boeing's order backlog alone represents over $400 billion in future revenue, indicating long-term work for the entire supply chain.
• The ongoing recovery and expansion of global travel is a primary driver for new aircraft orders and fleet modernisation.

Key Companies

• The Boeing Company (BA): A primary aircraft manufacturer whose massive scale and production needs create significant opportunities for a vast network of specialised suppliers.
• Raytheon Technologies Corporation (RTX): A key supplier providing critical engines and systems to both Boeing and Airbus, benefiting from the growth of the entire commercial aviation market.
• Lockheed Martin Corporation (LMT): A company primarily known for defence, whose advanced aerospace technologies and components are also utilised in commercial aviation, creating diversified revenue streams.
• According to Nemo research, detailed data on these companies is available on the Nemo landing page for the Powering The Aerospace Duopoly theme.

Primary Risk Factors

• Economic downturns could reduce travel demand, potentially leading to delayed or cancelled aircraft orders.
• Geopolitical tensions may disrupt international supply chains or impact global travel patterns.
• Intense competition among suppliers can put pressure on profit margins.
• Regulatory changes related to safety or environmental standards could require expensive product redesigns.

Growth Catalysts

• Both major manufacturers face pressure to increase production rates to clear multi-year order backlogs, creating sustained demand for suppliers.
• The need for more fuel-efficient and environmentally friendly aircraft drives innovation and creates pricing power for suppliers with superior technology.
• Long-term trends, including a growing middle class in emerging markets, support continued growth in global air travel.
• Airlines are engaged in a continuous fleet replacement cycle, replacing older, less efficient aircraft and creating a steady baseline of demand for Aerospace suppliers benefiting from Boeing-Airbus duopoly competition.

Investment Details

• Investing in Aerospace suppliers benefiting from Boeing-Airbus duopoly competition is an opportunity to gain exposure to the sector's growth.
• Nemo, a regulated broker under the ADGM FSRA, provides access to these investment opportunities.
• Investors can use the platform to learn how to invest in Aerospace suppliers benefiting from Boeing-Airbus duopoly competition with small amounts.
• The platform offers fractional shares for Aerospace suppliers benefiting from Boeing-Airbus duopoly competition companies, with investments starting from £1.
• All investments carry risk and you may lose money.