The free market works fine - the problem is at that scale, we can only afford a few key players, they're strategic so they end up having subsidies other considerations.
Put differently: if the population of the earth were 50 Billion people instead of 8 Billion - then we'd have markets with enough competition to allow free market dynamics.
In that context, then we'd have 'Space companies' being subsidized.
We'd have a hotel on the Moon and we'd easily be on Mars already.
Those aircraft are on the 'edge of our resource capabilities' - huge companies at the top of the pyramid.
If we had a massively bigger economic pyramid, they would be more like car companies.
I'm not sure if a bigger population would really justify more jet manufacturers.
Outside of general aviation (hobbyists/business jets), the potential buyers for jet aircraft are going to trend towards natural oligopoly.
Military craft, there's basically one buyer per country, at most a handful of different decision makers behind the same basic chequebook.
Civilian craft, does the number of airlines scale with population? There are a finite number of viable routes, airport slots, and market segments, so would it actually support a hundred new airlines, or would we just end up with a Big Southwest buying 1,000 737s instead of 100?
Even if you had more airlines, would they want to diversify their fleets? Running the same few types of planes, especially if they're the same types of planes as their competitors, unlocks efficiencies. How much would it cost a random American or European airline to retrain their pilots to fly the Comac C919, and how much would they spend extra on adaptations (stocking new spares, retraining maintenance staff, retooling processes for different floorplans)? I also suspect there's a very strong CYA/risk aversion mindset that would make it very hard to sell a new player into the market.
Regional flag carriers have political excuses to support a buy-local policy at some cost, but that still only justifies a handful of manufacturers per economic hegemon.
Put differently: if the population of the earth were 50 Billion people instead of 8 Billion - then we'd have markets with enough competition to allow free market dynamics.
In that context, then we'd have 'Space companies' being subsidized.
We'd have a hotel on the Moon and we'd easily be on Mars already.
Those aircraft are on the 'edge of our resource capabilities' - huge companies at the top of the pyramid.
If we had a massively bigger economic pyramid, they would be more like car companies.