It’s been a busy few weeks at GE Aerospace, and we wanted to share the highlights.
This past weekend, Chairman and CEO, Larry Culp joined Guy Johnson live on air. Key highlights from the discussion focused on the demand environment, supply chain and future of flight. You can see a recap of the discussion here.
Additionally, Larry recently joined Bernstein Managing Director and Aerospace & Defense Equity Research Analyst, Doug Harned, for a fireside chat at the 42nd Annual Bernstein Strategic Decisions Conference.
Culp outlined the momentum GE Aerospace continues to see across its commercial and defense business, which has grown the company’s backlog to over $210 billion, including over $170 billion in commercial services.
With FLIGHT DECK, our proprietary lean operating model, GE Aerospace continues to accelerate services and equipment output. Over the past 12 months, Commercial Engines and Services (CES) internal shop visit (ISV) revenue increased approximately 30%, while spare parts grew over 25%.
Culp also discussed our latest view on demand trends which have remained strong through the second quarter, amidst the current macro environment. The number of parked aircraft, a key indicator for retirements, declined in May relative to April and has remained lower since the beginning of the year. Spare parts orders were up >40% year-over-year from early March through mid-May. And, shop visit backlog is growing, supporting continued output. These are encouraging indicators that underlying services demand remains robust.
In addition, our young and diverse fleet supports further stability:
- CFM56: Average fleet age of less than 15 years, with 80% of our shop visits over the next few years from engines less than 20 years of age. And, most retirements happen after 20 years, limiting the risk if retirements do increase, which is not the current trend or expectation. We continue to expect workscopes will be stable given limited used material and greentime on engines.
- LEAP: Installed base is expected to more than double from 2025 to 2030 and exceed CFM56 by the end of the decade. Accelerating repair penetration, a growing third‑party network, and post‑launch pricing of aftermarket contracts strengthen profitability, positioning LEAP to reach CFM56‑level profit dollars by 2030.
- Widebody programs: GEnx remains the fastest‑growing engine platform, supported by a >75% life of program win rate. Growing the installed base will drive HSD ISV growth, all while continuing to see favorable workscope tailwinds from GE90 and GEnx. Additionally, CF6 and GE90 benefit from strong demand for freighter conversion that extends program life beyond 2050.
We are confident in our outlook and remain on track to deliver the high end of our full-year guidance. Longer term, our installed base continues to grow at a LSD/MSD CAGR, workscopes continue to be a structural tailwind, and pricing remains positive, supporting our medium-term double-digit growth outlook for Commercial Services, with those trends holding for 2027.
We also hosted a Defense & Propulsion Technologies (DPT) showcase at our historic Lynn, MA site where we gave investors a deeper look at DPT as a leading provider of mission critical capabilities and reliable propulsion systems for U.S. and allied militaries. Given we power two-thirds of U.S. military combat and rotorcraft fleets, we outlined the strength of our installed base and where we continue to see opportunities for growth across U.S. and allied fleets, as well as aeroderivatives. The team in Lynn also shared how FLIGHT DECK is supporting improved output, with Lynn engine output up 30% in 2025 without additional headcount. All the while, we are investing to deliver next-generation capabilities internationally and in the US, with next-gen making up 25% of Defense revenue by 2035. Through Edison Works, we’re focused on developing next gen combat aircraft, CCAs and Hypersonics and Hybrid Electric technology.
Additional highlights shared during the event include:
- We recently completed Assembly Readiness Review for XA102 adaptive cycle engine for U.S. next-generation combat propulsion, advancing to prototype development on schedule.
- In partnership with Kratos, our GEK1500 engine for a lower thrust CCA was selected to move to Preliminary Design Review (PDR). Additionally, GE Aerospace was awarded a contract by the U.S. Air Force to complete PDR for medium thrust CCA on our GE426 engine.
- We demonstrated a generative AI app that produced a preliminary hypersonic ramjet engine design in seconds, reducing months of early design work.
- We have partnered with BETA Technologies to develop a turbogenerator for BETA’s MV250 autonomous military logistics VTOL.
Additionally, we recently completed the first ground test of a megawatt-class hybrid electric engine, developed through NASA’s Electrified Powertrain Flight Demonstration (EPFD) project, proving hybrid electric engine technology for next-generation commercial aircraft.
The full presentation from both Bernstein SDC and the DPT showcase can be viewed on our GE Aerospace Investor Relations website.
We look forward to connecting with you during our second quarter earnings call on July 16th.
Thank you for your continued interest in GE Aerospace,
GE Aerospace Investor Relations team
For important information about forward-looking statements, please see here.