Two Point One Times Time-on-WingNarrow moat
GE Aerospace (GE) — moat facet
The durability upgrade is right for the customer and removes the event that generates the margin.
The most interesting engineering decision in this company is one that reduces its own revenue, and it is worth understanding why GE Aerospace makes it anyway.
In the June 2026 quarter the company completed certification of the LEAP-1B durability kit, including an upgraded high-pressure turbine blade, expected to deliver roughly a two-times improvement in time-on-wing, with full cutover expected from the beginning of 20271. The GEnx high-pressure turbine blade has already achieved more than 2.5 times improvement in hot and harsh environments2.
Time-on-wing is the interval between removals. Doubling it halves the number of shop visits an engine generates over its life — which is to say it halves the frequency of the event that produces GE Aerospace's margin.
The company does it because the alternative is worse. The LEAP entered service in 2016 into hot, dusty operating environments its early configuration handled badly, and the resulting removals cost airlines aircraft availability and cost GE Aerospace money under long-term service agreements, where the manufacturer rather than the operator bears the overhaul cost. A durable engine is cheaper for GE to support, keeps the fleet flying, and is what the customer buys next time.
The economics are therefore less bad than they look. Under a long-term service agreement a shop visit is a cost, not a sale; fewer of them improves the contract's profitability. Under time-and-material arrangements and spare-parts agreements a shop visit is a sale, and fewer of them does not. The mix determines whether durability helps or hurts, and GE Aerospace does not disclose it.
What can be watched is the aggregate. Internal shop visit revenue grew 24% in 20253 and 30% in the first half of 20264. The durability cutover begins at the start of 2027. If that growth rate decelerates sharply in 2028 and 2029 while the LEAP fleet keeps expanding, the engineering has been paid for out of the annuity.
The LEAP-1B durability kit is certified and cuts over from the beginning of 2027, with roughly two times the time-on-wing. It is the right engineering decision and it halves the frequency of the event that produces the margin. Under long-term service agreements that improves contract profitability; under spare-parts arrangements it does not, and the mix is not disclosed.
The new LEAP-1B durability kit, rolling in from early 2027, roughly doubles time between shop visits. Services growth slowing after that would show the fix reducing the visits that produce the margin.
Source: GE Aerospace Q2 2026 earnings release ↗- ReportedIn the June 2026 quarter the company completed certification of the LEAP-1B durability kit, including an upgraded high-pressure turbine blade, expected to deliver roughly a two-times improvement in time-on-wing, with full cutover expected from the beginning of 2027.GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
- ReportedThe GEnx high-pressure turbine blade has already achieved more than 2.5 times improvement in hot and harsh environments.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 ↗
- ReportedInternal shop visit revenue grew 24% in 2025 and 30% in the first half of 2026.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 ↗
- ReportedInternal shop visit revenue grew 24% in 2025 and 30% in the first half of 2026.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 ↗