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Investment decisions in new aircraft development programs are difficult because of large capital expenditures, long lead times, and many technical and market uncertainties. A flexible strategy, that takes advantage of the ability of managers to incorporate information as uncertainties are resolved, is suggested as a means to manage risk. In this paper, the use of real options analysis to evaluate and guide new aircraft development programs is illustrated through a case study of a real-world aircraft program. The analysis provides clear evidence that investors can use the numerical results of the real options analysis to determine how much they should spend on an aircraft program, that managers can use the same results to restructure the program to improve the financial feasibility of the project, and that both investors and managers can use the output of derivative analyses to define minimum requirements (in terms of aircraft orders) to ensure program success.