The development of a new airframe was characterized by huge initial cash outflows that might require between one and to decades to recoup. For example, the development costs for the Boeing 777 were rumored to be $7 billion. Any pricing would not only have to recoup the upfront development costs but also the production costs. In addition, pricing would be subject to rigorous, competitive pressures. In short because of the financial strains a new product line might create,
Each new aircraft was a “bet the ranch” proposition. Over time, survival in the industry depended on introducing successful products and having the deep financial pockets with wish which to survive the initially gushing cash flow.