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Boeing and Lockheed Martin are competing very fiercely to win the $100 billion Joint Strike Fighter (JSF) contract, which both regard as vital to their future. The JSF, which is due to come into service in 200, could be the last manned combat aircraft to be constructed in large numbers, and will almost certainly be the last new US military aircraft to be manufactured in large numbers for many years. The two companies are each producing two demonstrator aircraft to fly for the first time in 2000.

Boeing has bowed to European Commission concerns about its planned merger with McDonnell Douglas by agreeing to drop the exclusive 20-year supply agreements which it has signed with three US airlines. It had already agreed to restrict defence technology activities in the merged group's commercial operations and to make available separate accounts for the Douglas civil aircraft operations. It is still uncertain whether the European Commission will now vote in favour of the merger going ahead.

Boeing has had to face up to commercial realities and drop plans for a 550-seat version of its Boeing 747-400. It had raised the idea of a 'super jumbo' aircraft with many airlines, but only Singapore Airlines and British Airways had publicly expressed any interest. Boeing has been forced to conclude that the market is not yet ready for an aircraft of this kind. This will shed doubt on plans by Airbus Industrie to build a 550-seater aircraft.

Boeing and Airbus, the two largest aircraft manufacturers in the world, have clearly abandoned any plans to develop a large passenger jet together. Both companies are now considering developing separately an aircraft which would carry 500-600 people. The Airbus scheme is set to cost a lot more than Boeing's, but the former company cannot afford to allow Boeing to become dominant in this sector.