The market for commercial jetliners is dominated by two companies, Boeing (NYSE:BA) and Airbus. Airbus is owned by the recently privatized EADS (OTC:EADSY). But while Airbus now holds around 50% of the market, it's had a tough time turning that strength into profits.

The market wasn't always this lopsided. Indeed, although Boeing and Airbus now hold a duopoly over the market, with an equal market share, Airbus in particular has been fighting for market share during the past few decades. Back in 1980, Boeing controlled almost 80% of the large commercial aircraft market.

Nonetheless, according to Boeing, the world will need $4.8 trillion worth of new aircraft between now and 2032. That's roughly 35,280 new aircraft of varying sizes, from large wide-bodied jets to single-aisle regional planes If these numbers prove true both Boeing and Airbus will be extremely busy during the next two decades .

Fighting for orders
That said, it would appear that Airbus is in a better position to ride this trend than Boeing. Around 70% of the jets predicted to be ordered during the next two years are expected to be single-aisle narrow-body jets, a market in which Airbus is outselling Boeing. As of 2012, Airbus held 60% of the narrow-body jet market, edging out Boeing in the largest segment of the global aviation market.

What's more, the European-based Airbus has secured 16% more orders than Boeing due to delays on the 787 Dreamliner.

Supply, not demand issue
Still, according to a recent note published by Moody's investor service, Boeing could edge out Airbus over the next few years. However, this is a supply issue, not a demand one; Moody's believes that Airbus does not have sufficient manufacturing capacity to keep up with its larger American rival.

Airbus's order backlog is already considerably larger than Boeing's, and at current production rates, it would take nine years for the company to fill all existing orders placed.

Planes need engines 
If you can't decide between Airbus and Boeing, Rolls-Royce (OTC:RYCE.Y) may be the perfect middle-of-the-road company. As one of the world's leading aerospace companies, Rolls is set to ride the rising demand for commercial aircraft around the world during the next two decades.

Rolls-Royce predicts that the strong growth in the market for aircraft of 100 seats and over will require 71,000 engines with a market value of $415 billion between now and the year 2020.

Demand for the world renowned Rolls-Royce engines is already starting to hit the company. Rolls' order backlog expanded 15% year-on-year when the company reported its interim results during July this year. This took the backlog to £69.2 billion, or just under $111 billion, locking in five-and-a-half years of revenue based on 2012's figures .

While Airbus and Boeing have a duopoly over the commercial aircraft market, Airbus' owner, EADS, trades at a significant discount to Boeing. What's more, even after a 70% rise year to date, EADS still looks relatively undervalued when compared to its peer.

The reason for this valuation discount is unclear, although I believe it could be something to do with the company's exposure to the defense industry. You see, EADS is typically a defense company, and only 52% of the company's earnings before interest and tax came from its Airbus operations during the first nine months of this year.

Nonetheless, using enterprise value, or EV, multiples, EADS' true value becomes apparent. On a EV/Revenue and EV earnings-before-interest-tax-depreciation-and-amortization, or EV/EBITDA basis, EADS trades at a near 50% discount to Boeings forward multiples. For example:

Company EV/Revenue EV/EBITDA
Boeing 1.2 11.5
EADS 0.6 6.1

So all in all, investors need to decide if EADS's near 50% discount to Boeing is undervaluing the company. Even though there are concerns about global defense spending and the possibility that EADS defense division could see its earnings fall, it is likely that the rising demand for EADS' airbus divisions could offset this decline.

Having said all of that, some could argue that EADS' exposure to the defense market gives the company diversification outside of the traditional aerospace market. Whatever the case, I feel that EADS' current 50% discount to Boeing is too much.

Foolish summary 
Overall, demand for commercial aircraft is set to explode during the next two decades, and it would appear that EADS is in the best position to ride this trend. EADS' valuation is significantly lower than that of peer Boeing, despite both companies' similar market share. What's more, EADS' narrow-body aircraft are in demand, and the company's order backlog is testament to its reputation.

I feel that if investors want to profit from the rising demand for commercial aircraft, EADS' low valuation presents an opportunity that is too tempting to turn down. The low valuation mitigates much of the risk facing the company's defense division.