GE AerospaceWide moat

GE — overall economic moat

Investment snapshot
Wide moatConfidenceHighValuationExpensive
Strongest advantageAn installed base of 80,000 engines whose parts only GE Aerospace is certified to supply, for thirty years each
Greatest threatA run-off long-term-care book with $36.9bn of liabilities against $18.7bn of equity
Key metricInternal shop visit revenue (+24% in 2025, +30% in H1 2026)
Verdict: One of the widest moats in this collection and one of the least replicable: the engine is sold below cost, the parts pay for three decades, and a competitor with unlimited money would need roughly thirty years of certification and airframe selections to reach a dollar of it. Two things temper it. Half the narrowbody franchise belongs to Safran through a joint venture GE does not consolidate, and the company carries a long-term-care reinsurance book twice the size of its equity. At 37 times earnings with the forward multiple higher than the trailing one, the price already assumes the shop-visit catch-up cycle continues.
📈 GE valuation, revenue & earnings — P/E, P/S, revenue, EPS →

The most important number in GE Aerospace's accounts is a loss. In 2025 the company sold $12,159 million of equipment and the cost of that equipment was $12,382 million1. It sold jet engines for $223 million less than they cost to build, and it has now done so for four consecutive years2.

2025 revenue and what each line cost, in $m30,163Services sold16,586Services cost12,159Equipment sold12,382Equipment costInsurance revenue of $3,533m from the run-off book makes up the rest of the $45,855m.
The equipment cost more than it sold for. The services carried a 45% gross margin. Same transaction, thirty years apart.

That is not a failure. It is the business. In the same year GE Aerospace sold $30,163 million of services against a cost of $16,586 million — a gross margin of forty-five per cent3 — and those services are the maintenance, overhaul and spare parts consumed by engines it sold, at a loss, over the preceding three decades. An engine is a razor. The high-pressure turbine blade is the blade.

What makes it work is the installed base. GE Aerospace's own description is unusually plain: approximately 50,000 commercial and 30,000 military engines, supporting an aftermarket that represents about seventy per cent of revenue4. An airline that has bought the engine cannot change it without re-certifying the aircraft, the parts that keep it airworthy are approved for that engine and no other, and the machine will fly for twenty-five or thirty years.

The arithmetic of the company follows from that. Total revenue was $45,855 million: Commercial Engines & Services about seventy-three per cent of it, with services three quarters of the segment; Defense & Propulsion Technologies about twenty-three per cent5. CES earned $8,861 million at a 26.6% margin. DPT earned $1,296 million at 12.3%6. The commercial aftermarket is where the money is, and it is where the moat is.

The backlog says how long it lasts. Remaining performance obligation at the end of 2025 was $190,564 million, of which $163,029 million was services7 — and the company discloses the run-off: twelve per cent of that services backlog is expected to be recognised within a year, forty-two per cent within five, sixty-nine per cent within ten and eighty-six per cent within fifteen8. Something close to a seventh of it is contracted revenue arriving after 2041.

There is a wrinkle that no summary of this company should skip. GE Aerospace also owns a run-off long-term-care reinsurance book. Employers Reassurance stopped writing after 2008 and Union Fidelity closed in 2004, and between them they hold 201,700 policies covering 253,000 lives at an average attained age of eighty, sixty-three per cent of which carry a lifetime benefit period9. The insurance liabilities on the balance sheet are $36,894 million against total shareholders' equity of $18,677 million10. The jet engine company's largest single liability is nursing care.

And the crown jewel is half somebody else's. The LEAP and CFM56 engines are sold by CFM International, a fifty-fifty non-consolidated joint venture with Safran Aircraft Engines of France11. The narrowbody franchise — the exclusive engine on the Boeing 737 MAX and more than half the Airbus A320neo family — is shared.

The shares changed hands at about $317.56 in September 2026, roughly $329.5 billion, on 37.4 times trailing earnings and a 0.59% yield12. The verdict is a wide moat of an unusually durable kind: a certified, sole-source position on an installed base that took sixty years to assemble and will take thirty years to retire. What makes it a judgement rather than an obvious call is the price. The number that would falsify the thesis is the internal shop visit — the moment an engine comes off the wing and into a GE shop. It grew twenty-four per cent in 202513 and twenty-five per cent in the June 2026 quarter14. If that stops compounding while the equipment ramp continues, the company is selling engines at a loss into an annuity that has stopped growing. Each of the two segments is taken in turn in The Revenue Lines.

The number that tests this moat
Reported
Revenue, and where it comes from
$45.9 billion, of which services is $30.2 billion

Equipment was $12,159M against a cost of $12,382M — a gross loss — while services earned a 45.0% gross margin. Commercial Engines & Services is about 73% of revenue and Defense & Propulsion Technologies 23%, with a run-off insurance book supplying the rest. Watch internal shop visit revenue, which is the installed base converting into cash.

Source: GE Aerospace Form 10-K, fiscal year 2025 ↗
Moat scorecardHow ratings work →
Switching costs10/10
Network effects4/10
Pricing power8/10
Hard to replicate10/10
Disruption resistance7/10
Overall durability9/10

The switching cost is as close to absolute as this collection contains: an engine is certified to an airframe, and changing it means re-certifying the aircraft, which no airline does. Replication scores the same way - three companies can certify a large commercial turbofan and no new entrant has done so in forty years, because the barrier is regulatory time rather than capital. Pricing power is real in the commercial aftermarket and absent in defence, where a government audits the cost. The network effect is weak: this is an installed base, not a network. Disruption resistance is high but not perfect - approved alternative parts and used serviceable material compete inside GE's own overhauls, and durability improvements reduce the frequency of the shop visit that produces the margin.

Dig deeper
DIG DEEPER 01
The Revenue Lines
Commercial engines are three-quarters of the revenue and seven-eighths of the profit; defence is the ballast.
DIG DEEPER 02
The Moat
The barrier is not capital or engineering but certification and time: a competitor with unlimited money would need roughly three decades to take a…
DIG DEEPER 03
Competitors
Nobody has certified a new large commercial turbofan in forty years; the competition that matters is for the parts inside GE's own engines.
DIG DEEPER 04
Major Clients
No customer above ten per cent, and two companies decide which engines are allowed to exist.
✦ Future bets — beyond today's moat
✦ FUTURE BET 01
The Future Bets
An open fan, a fleet that has not been serviced yet, two defence engines, and an insurance book the company would like to give away.
⚠ Threats to the moat
⚠ THREAT 01
The Jet Engine Company That Reinsures Long-Term Care
201,700 long-term-care policies, average holder aged eighty, sixty-three per cent with no cap on the claim — inside a jet engine company.
⚠ THREAT 02
Thirty-Seven Times Earnings, and the Margin Is Falling
The forward multiple is higher than the trailing one, which is the market saying this year's earnings will be lower.
◆ What the market may be missing
◆ THE VARIANT VIEW
What the Market Isn't Pricing In
The equipment loss, the fifteen-year calendar and thirty-seven billion dollars of nursing care — none of it in the conversation.
◆ THE VARIANT VIEW
Inside the Latest Quarter (Q2 2026)
Revenue up twenty-one per cent, margins down 160 basis points, and both facts have exactly the same cause.
References
  1. ReportedIn 2025 the company sold $12,159 million of equipment and the cost of that equipment was $12,382 million.
    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 ↗
  2. Moat Explorer calcIt sold jet engines for $223 million less than they cost to build, and it has now done so for four consecutive years.
    Moat Explorer calculation from GE Aerospace's reported figures. Equipment gross margin: sales of equipment less cost of equipment sold was $(314)M in 2022, $(582)M in 2023, $(67)M in 2024 and $(223)M in 2025, about $1.2 billion cumulatively, and about -1.8% of equipment sales in 2025 against -0.7% in 2024. Services gross margin: (18,345-10,836)/18,345 = 40.9% in 2022, 42.4% in 2023, 43.8% in 2024 and (30,163-16,586)/30,163 = 45.0% in 2025. Services RPO of $163,029M against services revenue of $30,163M is 5.4 years, and $163,029M of $190,564M is 86%. LEAP deliveries of 1,570 + 1,407 + 1,802 + 1,030 in the first half of 2026 total 5,809 since the start of 2023. LEAP was 1,802 of 2,386 commercial engines in 2025, 75.5%. — FY2022-FY2026 · publ. September 2026 · source ↗
  3. ReportedIn the same year GE Aerospace sold $30,163 million of services against a cost of $16,586 million — a gross margin of forty-five per cent — and those services are the maintenance, overhaul and spare parts consumed by engines it sold, at a loss, over the preceding three decades.
    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 ↗
  4. ReportedGE Aerospace's own description is unusually plain: approximately 50,000 commercial and 30,000 military engines, supporting an aftermarket that represents about seventy per cent of revenue.
    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 ↗
  5. ReportedTotal revenue was $45,855 million: Commercial Engines & Services about seventy-three per cent of it, with services three quarters of the segment; Defense & Propulsion Technologies about twenty-three per cent.
    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 ↗
  6. ReportedDPT earned $1,296 million at 12.3%.
    GE Aerospace Form 10-K, FY2025 - Segment Operations — Defense & Propulsion Technologies: segment revenue split between Defense & Systems and Propulsion & Additive Technologies, equipment and services revenue, segment profit and margin, defence engine unit deliveries, the DPT remaining performance obligation, the US Air Force F110-GE-129 Indefinite Delivery/Indefinite Quantity contract valued up to $5 billion, the Hindustan Aeronautics F404-GE-IN20 order valued at $1.6 billion, and the government-funding discussion. — FY2025 · publ. January 2026 · source ↗
  7. ReportedRemaining performance obligation at the end of 2025 was $190,564 million, of which $163,029 million was services — and the company discloses the run-off: twelve per cent of that services backlog is expected to be recognised within a year, forty-two per cent within five, sixty-nine per cent within ten and eighty-six per cent within fifteen.
    GE Aerospace Form 10-K, FY2025 - Management's Discussion and Analysis — consolidated results, profit and operating profit margins, adjusted earnings per share, total remaining performance obligation and its year-on-year movement, cash flow from operations and free cash flow, the share repurchase programme, borrowings and the financing-arrangement discussion. — FY2025 · publ. January 2026 · source ↗
  8. ReportedRemaining performance obligation at the end of 2025 was $190,564 million, of which $163,029 million was services — and the company discloses the run-off: twelve per cent of that services backlog is expected to be recognised within a year, forty-two per cent within five, sixty-nine per cent within ten and eighty-six per cent within fifteen.
    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 ↗
  9. ReportedEmployers Reassurance stopped writing after 2008 and Union Fidelity closed in 2004, and between them they hold 201,700 policies covering 253,000 lives at an average attained age of eighty, sixty-three per cent of which carry a lifetime benefit period.
    GE Aerospace Form 10-K, FY2025 - Other Items - Insurance — the run-off insurance operations comprising Employers Reassurance Corporation and Union Fidelity Life Insurance Company, and the long-term care portfolio table giving reserve balances, policies and covered lives in force, average policyholder attained age, the proportions with lifetime benefit periods, inflation protection options and joint lives, policies on claim, and the structured settlement annuity disclosure. — FY2025 · publ. January 2026 · source ↗
  10. ReportedThe insurance liabilities on the balance sheet are $36,894 million against total shareholders' equity of $18,677 million.
    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 ↗
  11. ReportedThe LEAP and CFM56 engines are sold by CFM International, a fifty-fifty non-consolidated joint venture with Safran Aircraft Engines of France.
    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 ↗
  12. ReportedThe shares changed hands at about $317.56 in September 2026, roughly $329.5 billion, on 37.4 times trailing earnings and a 0.59% yield.
    GE Aerospace (GE) market data - share price, market capitalisation, trailing and forward price/earnings, trailing revenue, net income and earnings per share, dividend and yield, shares outstanding and the 52-week range. — September 2026 · publ. September 2026 · source ↗
  13. ReportedIt grew twenty-four per cent in 2025 and twenty-five per cent in the June 2026 quarter.
    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 ↗
  14. ReportedIt grew twenty-four per cent in 2025 and twenty-five per cent in the June 2026 quarter.
    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