Development Costs for Selected Aircraft


Aircraft Year of First Service Development Costs (USD) Constant 2004 Dollars
Douglas DC-3 1936 4.3 Million
Douglas DC-6 1946 144 Million
Boeing 707 1958 1.3 Billion
Boeing 747 1970 3.7 Billion
Boeing 777 1995 7.0 Billion
Airbus A380 2007 14.4 Billion
Boeing 787 2012 13.4 Billion

Source: Adapted from Bowen, J. (2010) The Economic Geography of Air Transportation: Space, Time, and the Freedom of the Sky. London: Routledge.

Development costs involve a series of costs related to the research and development efforts that goes into a new product, such as marketing, design and engineering. For a complex product such as an aircraft, the design and engineering aspects are very costly since they involve the creation of new engineering techniques and technologies for the materials, parts and their assembly. Further, parts and aircrafts are subject to the testing and approval of regulatory agencies before a new aircraft generation is allowed to be commercialized. Even after adjusting for inflation, the development costs for new airliners have skyrocketed with each generation at least having double the development costs. This reflects the growing complexity of aircrafts and the regulatory environment in which they are operating