✦ The Future BetsNarrow moat

GE Aerospace (GE) — 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.

GE Aerospace's future divides cleanly into one thing that is already certain, one that is being engineered, one that is being competed for, and one the company would like to stop owning.

Four things, in order of certaintyCertainthe LEAP fleet arrivingat its first shop visitsEngineeredRISE: 350+ tests,still a demonstratorCompeted forXA102 and GE426defence programmesWanted gone$36,894m of run-offinsurance liabilitiesInternal shop visit revenue grew 24% in 2025 and 30% in the first half of 2026.
Only the first of these needs no invention, no approval and no competitive win.

The certain thing is the LEAP fleet coming due. Something over 5,800 LEAP engines have been delivered since the start of 20231, most of which have never been through a shop. The services backlog stood at $178,705 million at June 20262, releasing twelve per cent a year3. Nothing has to be invented for that to arrive; it arrives as aircraft accumulate hours.

The engineered thing is RISE. CFM's programme is advancing an open fan, a compact core and hybrid-electric systems, with more than 350 tests completed toward ground and flight tests this decade4, and in 2026 GE Aerospace completed the first ground tests of a megawatt-class hybrid-electric engine system under NASA's Electrified Powertrain Flight Demonstration project5. It is explicitly a technology demonstrator rather than a product for sale6.

The competed-for thing is next-generation defence propulsion. The XA102 adaptive-cycle engine passed its Assembly Readiness Review in 2026, and the company secured a United States Air Force contract to mature the GE426 engine through preliminary design review for a medium-thrust-class Autonomous Collaborative Platform7.

The thing it would like to be rid of is the run-off insurance book — $36,894 million of liabilities8 that have nothing to do with jet engines and that the company says it may consider strategic options to reduce, while noting such options may not be viable or attractive9.

The aspect is narrow and widening. The measure is the one that requires no technology at all: internal shop visit revenue, growing 24% in 202510 and 30% in the first half of 202611. Everything else here is optional. That is not.

Moat trajectory: Widening

Almost all of it is already in motion: the LEAP fleet is arriving at its first shop visits, RISE has completed more than 350 tests, the XA102 passed its Assembly Readiness Review and the GE426 secured a US Air Force contract. The insurance disposal is the one item with no visible progress.

The number that tests this moat
Reported
Internal shop visit revenue
+24% in 2025, +30% in the first half of 2026

The one part of the future that needs no invention, no approval and no competitive win. RISE, the defence programmes and the insurance disposal are all optional; the LEAP fleet arriving at its first overhauls is not.

Source: GE Aerospace Form 10-K, fiscal year 2025 ↗
✦ Future bets — beyond today's moat
✦ FUTURE BET 01
The LEAP Fleet Coming Due
The most valuable thing in this company's future needs no invention and no competitive win. It needs aircraft to fly.
✦ FUTURE BET 02
RISE, the Open Fan and a Decade of Optionality
Every dollar spent on RISE is an option premium until an airframer commits an aircraft to it.
✦ FUTURE BET 03
XA102, GE426 and the Next Generation of Defence
Two engines in development, both largely funded by the customer who will decide whether to buy them.
✦ FUTURE BET 04
Getting the Insurance Book Off the Balance Sheet
Removing $36.9 billion of long-term-care liabilities would be the largest re-rating event available to a jet engine company.
References
  1. Moat Explorer calcSomething over 5,800 LEAP engines have been delivered since the start of 2023, most of which have never been through a shop.
    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 ↗
  2. ReportedThe services backlog stood at $178,705 million at June 2026, releasing twelve per cent a year.
    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 ↗
  3. ReportedThe services backlog stood at $178,705 million at June 2026, releasing twelve per cent a year.
    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. ReportedCFM's programme is advancing an open fan, a compact core and hybrid-electric systems, with more than 350 tests completed toward ground and flight tests this decade, and in 2026 GE Aerospace completed the first ground tests of a megawatt-class hybrid-electric engine system under NASA's Electrified Powertrain Flight Demonstration project.
    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 ↗
  5. ReportedCFM's programme is advancing an open fan, a compact core and hybrid-electric systems, with more than 350 tests completed toward ground and flight tests this decade, and in 2026 GE Aerospace completed the first ground tests of a megawatt-class hybrid-electric engine system under NASA's Electrified Powertrain Flight Demonstration project.
    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 ↗
  6. Third-party estimateIt is explicitly a technology demonstrator rather than a product for sale.
    Aviation and market coverage of GE Aerospace's narrowbody position and delivery ramp - the LEAP as the exclusive powerplant on the Boeing 737 MAX and holding more than 55% of the Airbus A320neo family through the CFM joint venture, the target of about 2,000 LEAP deliveries in 2026, first-half deliveries up 41%, and CFM RISE described as a technology demonstrator rather than a product for sale. — 2026 · publ. August 2026 · source ↗
  7. ReportedThe XA102 adaptive-cycle engine passed its Assembly Readiness Review in 2026, and the company secured a United States Air Force contract to mature the GE426 engine through preliminary design review for a medium-thrust-class Autonomous Collaborative Platform.
    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 ↗
  8. ReportedThe thing it would like to be rid of is the run-off insurance book — $36,894 million of liabilities that have nothing to do with jet engines and that the company says it may consider strategic options to reduce, while noting such options may not be viable or attractive.
    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 ↗
  9. ReportedThe thing it would like to be rid of is the run-off insurance book — $36,894 million of liabilities that have nothing to do with jet engines and that the company says it may consider strategic options to reduce, while noting such options may not be viable or attractive.
    GE Aerospace Form 10-K, FY2025 - Item 1A Risk Factors — supply chain and supplier capacity, product safety and quality, run-off insurance and the Bank BPH mortgage portfolio in Poland including the Genworth trust counterparty exposure, borrowings and liquidity, and regulatory and legal risks. — FY2025 · publ. January 2026 · source ↗
  10. ReportedThe measure is the one that requires no technology at all: internal shop visit revenue, growing 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 ↗
  11. ReportedThe measure is the one that requires no technology at all: internal shop visit revenue, growing 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 ↗
Sources
Generated September 23, 2026