⚠ The Parts Business Has an Aftermarket of Its OwnModerate threat

GE Aerospace (GE) — threat to the moat

The regulator that protects GE Aerospace's parts also approves somebody else's.

The one place the certification barrier works against GE Aerospace is that regulators also certify other people's parts.

Who supplies the parts in a GE overhaulGE new parts, sold into 50,000 commercial enginesLong-term service agreements bundle parts and labour: 10-25 yrsApproved alternative parts: regulator-certified, no GE consentUsed serviceable material harvested from retired enginesThe pressure is strongest on mature fleets like the CFM56 — the largest until LEAP overtakes it.
The regulator that protects GE’s certification also approves somebody else’s replacement part.

An approved alternative part is manufactured by a third party and approved by the regulator as equivalent for a specific application. It does not need the engine maker's permission. Alongside it sits used serviceable material — components harvested from retired engines, inspected, re-certified and returned to service. Both compete directly with a new GE part in the same overhaul, and both are cheaper.

The pressure is strongest exactly where the annuity is richest: on mature, high-volume engine types where the fleet is large enough to support an independent parts industry and old enough that retirements supply the used market. The CFM56, which the LEAP is expected to overtake as the industry's largest fleet1, is the archetype.

GE Aerospace's defences are real and partial. Long-term service agreements bundle parts with the overhaul, so the operator does not choose part by part. Warranty and residual-value considerations push lessors toward manufacturer parts. And the company licenses MRO technology and sells spare parts to third-party shops2, which converts some would-be competitors into customers.

The structural answer is newer engines. A LEAP or a GEnx has a smaller retired population to harvest and a shorter list of approved alternatives, because both take years to accumulate. Which means the alternative-parts threat is always a threat to yesterday's fleet rather than tomorrow's — and it grows as each fleet matures.

Services revenue per shop visit, rather than shop visit count, is what would show it. GE Aerospace discloses internal shop visit revenue growth — 24% in 20253 and 25% in the June 2026 quarter4 — but not the volume underneath it. Shop visit revenue growing more slowly than the installed base would be the signal that somebody else's parts are going into GE's engines.

References
  1. ReportedThe CFM56, which the LEAP is expected to overtake as the industry's largest fleet, is the archetype.
    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. ReportedAnd the company licenses MRO technology and sells spare parts to third-party shops, which converts some would-be competitors into customers.
    GE Aerospace Form 10-K, FY2025 - Item 1 general and Item 2 Properties — the installed base of approximately 50,000 commercial and 30,000 military engines and the statement that it supports an aftermarket representing approximately 70% of revenue, the FLIGHT DECK operating model, customers in approximately 120 countries, the facility count, human capital and employee numbers, the intellectual property discussion, the research and development table splitting company-funded from customer- and partner-funded spending, and the engine testing milestones. — FY2025 · publ. January 2026 · source ↗
  3. ReportedGE Aerospace discloses internal shop visit revenue growth — 24% in 2025 and 25% in the June 2026 quarter — but not the volume underneath it.
    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 ↗
  4. ReportedGE Aerospace discloses internal shop visit revenue growth — 24% in 2025 and 25% in the June 2026 quarter — but not the volume underneath it.
    GE Aerospace Form 10-Q for the quarter ended June 30, 2026, Management's Discussion and Analysis — consolidated revenue, profit and earnings per share, the segment results for Commercial Engines & Services and Defense & Propulsion Technologies, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the remaining performance obligation and its equipment and services split, the supply chain, tariff and Middle East discussions, and the planned $1 billion US manufacturing investment and 5,000 US hires. — Q2 2026 · publ. July 2026 · source ↗
Sources
Generated September 23, 2026