ABSTRACT
This chapter briefly outlines the demand for military aircraft and presents the major aerospace corporations catering to the defence market. It presents a general overview of the composition of output and size of the major aircraft producers in the USA and Western Europe. Defence production is characterised by a highly concentrated market structure. On the demand side, the government is the sole purchaser of defence output and thus is a monopsonist. The obverse of concentrated defence contract allocations is a marked dependence on defence sales by the recipient firms, especially aerospace companies. A scant 21 years later hostilities would again erupt and the aircraft industry would again mobilise to meet the demands of war. The crux of the defence market is the relationship between the defence contractors and the state. A salient characteristic of the defence market for aircraft is that the contract terms rest primarily on the grounds of technical criteria at the virtual expense of cost-competitive criteria.
