Jaworski and Smyth, 2018, Shakeout among airframe manufacturers starting 1930s

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  • "Following a large expansion in aircraft production during the First World War, the market for airframes collapsed and remained small throughout the 1920s; airlines carried fewer than 10,000 revenue-passengers prior to 1928." And there wasn't much military demand after WWI either. Both kinds of demand rose, or bounced back, after 1930. (page 624)
  • Basic chart data: There's a huge spike in the number of U.S. airframe-making firms from 1926 to 1929-30 then a sharp decline to 1932-4. The number of passengers annually is rising substantially after 1927 and very sharply after 1935. Charts on p. 620
  • Douglas Aircraft's DC-3 sharply cut operating costs for airlines. From its introduction in 1936 it quickly making up 80% of new aircraft put in service by [US] airlines by 1941.
  • Cite's Pattillo's Pushing the Envelope significantly as does the successor paper
  • Consolidated-Vultee Aircraft (Convair) and its predecessors did not successfully introduce a new commercial aircraft from 1931 to 1937, but bounced back afterward. So did Boeing Aircraft. Something made it possible for them to surge long after the industry launched.(page 621)
  • This industry is unusual in that government military demand and related R&D was so great throughout the period. (page 621, notably citing Phillips)
  • page 621-622 offer Klepper's regression of shakeouts rationalized/semi-structural based on costs and prices, where firms are making choices. Readable and usable.

In the 1920s US airframe makers were generally organized in holding companies. They tended not to be funded by debt but by stock investors and retained earnings. (p642)

  • Maybe the most important of these was William Boeing's United Air & Transport
  • Others were: Aviation Corporation, Curtiss-Wright, Detroit, and Douglas (p625)
  • "The holding companies were disbanded by the Air Mail Act in June 1934. The Act "separated airframe manufacturers from airlines" (p624-5)
  • "The rise in concentration in the late 1930s" is due to the Douglas DC-3 which took over. (p626) It was a dominant design in the language of Utterback and Suarez.
  • Phillips (Technology and market structure) says the military aircraft market broke away from the commercial aircraft market; the timing of this is after 1920. Tech causes are not explicit here (p626)
  • MAA went from 1917 to 1975
  • Aircraft engines in the US were produced mainly by Curtiss-Wright and by Pratt-Whitney (p627)
  • Helpful quot from 1934: Aero-engine mfrs were really manufacturers, and were on "firmer" demand ground than were the airframe makers who were mainly assembler/contractors.
  • civil aircraft unit cost (in the US) rose from $4854 in 1928 to $8413 in 1937. The author attributes this to rapid technology change, and cites IB Holley's Buying aircraft for the data.
  • government contracts to these commercial airrame firms took two forms: air mail (service) contracts, and military airframe (purchase) contracts. (p628)
  • has data attributes of 118 planes (designs/products, not instances), produced by 49 manufacturers, all after 1925. Source: Phillips
  • regression of "market share > 0" (I think; a binary) on attributes and government contracts, p 630. Finding: mil contracts and air mail contracts helped a plane design survive, a lot
  • p 634: rosenberg found that under 60% of avivation advances from the military context also were put to use in the civilian context. ! could compare that to the early period
  • conclusion: government demand really shaped this industry and made a shakeout look quite different from the way it looked among tiremakers, automobile makers, and TV makers.

References


Original title Shakeout in the early airframe industry
Simple title Shakeout in the U.S. airframe industry after 1930
Authors Taylor Jaworski, Andrew Smyth
Date 2018
Countries US, GB
Languages en
Keywords airframe, industry, history
Journal Economic History Review
Related to aircraft? 1
Page count 22
Word count
Wikidata id
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