⚠ Half the Economics of the Best Engines Are SharedModerate threat

GE Aerospace (GE) — threat to the moat

Half a franchise, compounding at twenty-six per cent margins, is worth more than most whole ones — and it is still half.

It is worth stating the plain financial version of this facet, because the enthusiasm around GE Aerospace usually skips it. The narrowbody franchise that produced 1,802 of its 2,386 commercial engine deliveries in 2025 runs through a venture in which it holds fifty per cent.

Commercial Engines & Services segment profit, in $m202320242025Margins of 23.7%, 26.2% and 26.6%. Half a franchise, compounding.
Half a franchise growing at this rate is worth more than most whole ones — and it is still half.

CFM International is non-consolidated1, so its revenue never appears in GE Aerospace's $45,855 million top line2. What appears is GE Aerospace's own share of the work — the hot section, the spare parts, the overhauls performed in its shops — plus equity income recorded within other segment expenses (income), which was a $677 million credit in Commercial Engines & Services in 2025 against $548 million in 20243.

So an investor buying GE Aerospace for the LEAP franchise is buying roughly half of it, and buying it inside a company whose reported revenue is smaller than the franchise it markets. That is not concealment — the structure is disclosed in the first pages of the 10-K — but it does mean comparisons of GE Aerospace's revenue against competitors who consolidate their engine ventures are not like for like.

What GE Aerospace gets in exchange is a halved development cost on programmes that run to several billion dollars each, a second industrial base, and a partner with every incentive to keep the venture successful. Over fifty-two years that has been a good trade, and the CFM56 and LEAP are the evidence.

The test is whether the shared economics are growing the company's own profit. Commercial Engines & Services segment profit went from $5,643 million in 2023 to $7,055 million in 2024 to $8,861 million in 20254, at margins of 23.7%, 26.2% and 26.6%. Half a franchise, compounding at that rate, is worth more than most whole ones.

References
  1. ReportedCFM International is non-consolidated, so its revenue never appears in GE Aerospace's $45,855 million top line.
    GE Aerospace Form 10-K, FY2025 - Item 1 Business — segment descriptions for Commercial Engines & Services and Defense & Propulsion Technologies, the CFM International 50-50 non-consolidated joint venture with Safran Aircraft Engines, the commercial engine platforms (LEAP, CFM56, GEnx, GE9X, CF6, GE90), the defence platforms (F110, F404, F414, T408, T700, T901, LM2500), the Propulsion & Additive Technologies brands, the CFM RISE programme, the customer description including airframers and sole-source positions, and the segment revenue and services shares. — FY2025 · publ. January 2026 · source ↗
  2. ReportedCFM International is non-consolidated, so its revenue never appears in GE Aerospace's $45,855 million top line.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
  3. ReportedWhat appears is GE Aerospace's own share of the work — the hot section, the spare parts, the overhauls performed in its shops — plus equity income recorded within other segment expenses (income), which was a $677 million credit in Commercial Engines & Services in 2025 against $548 million in 2024.
    GE Aerospace Form 10-K, FY2025 - notes to the consolidated financial statements — the segment note including segment expenses, segment profit and other segment income; contract assets, contract liabilities and long-term service agreement balances; the remaining performance obligation note with its expected recognition schedule; goodwill and intangible assets; and the geographic revenue table. — FY2025 · publ. January 2026 · source ↗
  4. ReportedCommercial Engines & Services segment profit went from $5,643 million in 2023 to $7,055 million in 2024 to $8,861 million in 2025, at margins of 23.7%, 26.2% and 26.6%.
    GE Aerospace Form 10-K, FY2025 - Segment Operations — Commercial Engines & Services: segment revenue, profit and margin, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the CES remaining performance obligation, the 2025 engine commitments from Qatar Airways, Emirates, International Airlines Group, ANA Holdings, Malaysia Aviation Group, Korean Air, Cathay Pacific and Pegasus, and commercial departures growth. — FY2025 · publ. January 2026 · source ↗
Sources
Generated September 23, 2026