The market for commercial jetliners is dominated by two companies: Boeing (NYSE:BA) and Airbus (OTC:EADSF). 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
Airbus is in a much better position to benefit from the rising demand for aircraft orders 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. Boeing's new 777x aircraft, the largest and most efficient twin-engine jet, is coming to market soon however. This means that things could be about to change.

Supply, not demand issue
What's more it would also appear as if Airbus has shot itself in the foot, as demand for the company's aircraft is rising faster than supply. In particular, Airbus has recently announced that it delivery a record number of planes during 2013 but the company does not plan on increasing capacity during 2014 and expects to deliver a similar number of plans for full-year 2014.

Management's decision not to increase manufacturing capacity is surprising as Airbus ended 2013 with a backlog of 5,559 planes, an industry record according to one source. At current rates of production, this backlog will take nine years to clear. Meanwhile, Boeing is churning out more aircraft than Airbus, delivering 648 plans during 2013 compared to Airbus' 626 deliveries.

Planes need engines 
If you can't decide between Airbus and Boeing, Rolls-Royce (OTC:RYCEY) 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, and locked in five-and-a-half years of revenue based on 2012's figures.

Furthermore, Rolls is not just limited to one customer. Specifically, within the company's interim management statement delivered back in November the company revealed that it was working with both Airbus and Boeing, as well as multiple carries around the world to develop and manufacture engines.

While Airbus and Boeing have a duopoly over the commercial aircraft market, Airbus trades at a significant discount to Boeing.

If we use enterprise value, or EV, multiples, Airbus' true value becomes apparent. On a EV/revenue and EV/earnings-before-interest-tax-depreciation-and-amortization (EV/EBITDA) basis, Airbus trades at a discount of greater than 20% to Boeings trailing-twelve-month multiples. For example:










Source: Yahoo! Finance. Trailing-12-month values.

Foolish summary 
Overall, demand for commercial aircraft is set to explode during the next two decades. It would appear that Airbus is in the best position to ride this trend. Airbus' valuation is significantly lower than that of peer Boeing, despite both companies' similar market share. What's more, Airbus' 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, Airbus' low valuation presents an opportunity that is too tempting to turn down. Of course, if you can't make up your mind, Rolls-Royce is also a great pick.