⚠ The Old Fleet RetiresLow threat

RTX (RTX) — threat to the moat

Pratt & Whitney's most profitable overhauls come from an engine that is out of production and can only retire.

The best aftermarket in Pratt & Whitney's portfolio is in run-off. The V2500 is no longer being built, so its installed base can only shrink. Today low retirement rates are a tailwind; the company named them as a reason for 18% commercial aftermarket growth companywide in the second quarter of 20261.

What the V2500 run-off rests onCommercial aftermarket growth, Q2 202618%Pratt net share of the V250057%Pratt margin, 20257.9%Collins margin, 202516.3%RTX Form 10-K FY2025 and Q2 2026 earnings release
The old fleet pays well today, into a segment with little margin to spare.

Retirements are postponed, not cancelled. When new aircraft arrive in volume, airlines retire older jets, and with them the most profitable overhauls. The GTF fleet that replaces them earned less per visit in 2024, as the company itself noted2.

The risk is that the two curves cross badly: old-engine income falls before new-engine income matures. Pratt & Whitney's margin, 7.9% in 2025 against 16.3% at Collins34, leaves little room for that.

The partner arrangement softens the blow and shares the loss. Pratt & Whitney's net share of the V2500 is 57%5, so MTU and the Japanese partners carry the rest of the decline too. And the Rolls-Royce flight-hour payments that end in June 20276 should leave Pratt with more of each remaining V2500 flight hour just as the fleet begins to shrink.

Airbus's production rate is the trigger to watch, since new deliveries drive retirements. The margin shows the outcome: a segment margin below 7% in a year of rising aftermarket sales would say the old fleet's income is leaving faster than the new fleet's arrives.

References
  1. ReportedToday low retirement rates are a tailwind; the company named them as a reason for 18% commercial aftermarket growth companywide in the second quarter of 2026.
    RTX second-quarter 2026 earnings call transcript (The Motley Fool) - Raytheon bookings and book-to-bill, GTF aircraft-on-ground and MRO output, munitions output, framework agreements, the defence budget request, GTF Advantage, Collins margin plans and segment outlook - commercial: GTF fleet, maintenance output, aftermarket, orders, Collins and the outlook. — Q2 2026 · publ. 24 July 2026 · source ↗
  2. ReportedThe GTF fleet that replaces them earned less per visit in 2024, as the company itself noted.
    RTX Form 10-K for fiscal 2025 - Item 7 segment review and Note 20: net sales and operating profit by segment for 2023-2025, organic sales drivers (commercial aftermarket, OEM, military), sales by customer type, products and services, segment assets, capital expenditure and research and development - Pratt & Whitney: segment sales, operating profit, organic drivers, customer types, assets and capital expenditure. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  3. ReportedPratt & Whitney's margin, 7.9% in 2025 against 16.3% at Collins, leaves little room for that.
    RTX Form 10-K for fiscal 2025 - Item 7 segment review and Note 20: net sales and operating profit by segment for 2023-2025, organic sales drivers (commercial aftermarket, OEM, military), sales by customer type, products and services, segment assets, capital expenditure and research and development - Pratt & Whitney: segment sales, operating profit, organic drivers, customer types, assets and capital expenditure. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  4. Moat Explorer calcPratt & Whitney's margin, 7.9% in 2025 against 16.3% at Collins, leaves little room for that.
    Moat Explorer calculation from RTX's segment results (Forms 10-K FY2023 and FY2025, Q2 2026 earnings release; $ millions). Operating margins: Collins 2,380 / 21,152 = 11.3% (2021), 2,816 / 23,052 = 12.2% (2022), 4,923 / 30,196 = 16.3% (2025), H1 2026 2,613 / 15,812 = 16.5%, Q2 2026 1,306 / 8,210 = 15.9%, Q1 2026 (first half less Q2) 1,307 / 7,602 = 17.2%; Pratt & Whitney 454 / 18,150 = 2.5% (2021), 1,075 / 20,530 = 5.2% (2022), 2,015 / 28,066 = 7.2% (2024), 2,596 / 32,916 = 7.9% (2025), H1 2026 1,448 / 17,062 = 8.5%, Q2 2026 738 / 8,889 = 8.3%; Raytheon 3,399 / 26,611 = 12.8% (2021), 2,448 / 25,176 = 9.7% (2022), 2,379 / 26,350 = 9.0% (2023), 3,227 / 28,043 = 11.5% (2025), Q2 2026 1,042 / 8,269 = 12.6%; Q1 2026 Raytheon sales 15,214 - 8,269 = 6,945. Growth 2021-2025: Collins 30,196 / 21,152 - 1 = 43% (about 9% a year), operating profit 4,923 / 2,380 = 2.07 times; Pratt & Whitney 32,916 / 18,150 - 1 = 81%, 2025 32,916 / 28,066 - 1 = 17%; Raytheon 28,043 / 26,611 - 1 = 5%. 2025 shares of segment sales (91,155): Pratt & Whitney 36%, Collins 33%, Raytheon 31%; of segment operating profit (10,746): Collins 4,923 = 45.8%, Raytheon 3,227 = 30.0%, Pratt & Whitney 2,596 = 24.2%. Operating profit over segment assets 2025: Collins 4,923 / 71,680 = 6.9%, Raytheon 3,227 / 44,795 = 7.2%, Pratt & Whitney 2,596 / 52,482 = 4.9%. Pratt & Whitney services share 14,449 / 32,916 = 44%; services growth 14,449 / 9,717 = 1.49 times. Collins commercial share 18,858 / 27,585 = 68%; Collins government sales 7,061 + 436 + 1,230 = 8,727, 8,727 / 27,585 = 32%. Raytheon U.S. government share 19,237 / 27,892 = 69%. Collins services share 6,118 / 27,585 = 22%. Pratt & Whitney segment assets 52,482 / 44,307 - 1 = 18%. Pratt & Whitney 2025 defence bookings other than F135: about 9.0 - 2.9 - 2.4 = 3.7 billion. GE Aerospace Commercial Engines & Services profit 8,861 against Pratt & Whitney 2,596: 3.4 times; margins 26.6% against 7.9%. — 2021-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in RTX's Forms 10-K and 10-Q, earnings releases, earnings call and market data; operands shown in the source line.
  5. ReportedPratt & Whitney's net share of the V2500 is 57%, so MTU and the Japanese partners carry the rest of the decline too.
    RTX Form 10-K for fiscal 2025 - Item 1 business: the three segments and their products, the GTF family powering more than 2,600 aircraft for over 90 operators, the F135 as sole-source engine on all F-35 variants, GTF Advantage certification, the IAE collaboration shares, employees (about 180,000 in 52 countries, 69% in the U.S.) and the divested businesses. — FY2025 · publ. 6 February 2026 · source ↗
  6. ReportedAnd the Rolls-Royce flight-hour payments that end in June 2027 should leave Pratt with more of each remaining V2500 flight hour just as the fleet begins to shrink.
    RTX Form 10-K for fiscal 2025 - Item 1 business: the three segments and their products, the GTF family powering more than 2,600 aircraft for over 90 operators, the F135 as sole-source engine on all F-35 variants, GTF Advantage certification, the IAE collaboration shares, employees (about 180,000 in 52 countries, 69% in the U.S.) and the divested businesses. — FY2025 · publ. 6 February 2026 · source ↗
Sources
Generated September 28, 2026