The LEAP Fleet That Has Not Been Serviced YetNarrow moat

GE Aerospace (GE) — moat facet

Thousands of engines delivered at a loss since 2016, most of which have never seen a shop.

The single largest asset GE Aerospace owns is a fleet of engines that has cost it money and has not yet paid anything back.

LEAP engines delivered1,57020231,40720241,8022025~2,0002026 targetAbout 5,800 delivered since the start of 2023, almost none of which has been overhauled.
Every one sold inside an equipment package at a negative gross margin, against an annuity that has not started.

The LEAP entered service in 2016. GE Aerospace and its partner have delivered 1,570 of them in 2023, 1,407 in 2024 and 1,802 in 20251, with a target of around 2,000 in 20262 and deliveries up forty-one per cent in the first half of that year3. Every one was sold as part of an equipment package carrying a negative gross margin4.

A modern narrowbody engine typically runs several years before its first removal, and the interval is lengthening: the LEAP-1B durability kit certified in 2026 is expected to deliver roughly two times the time-on-wing5. So the great majority of the LEAP fleet has never generated an overhaul, and the earliest deliveries are only now entering their second visits.

This is what the market is buying. It is also why the reported numbers look strange: revenue growing above twenty per cent, margins contracting, and an enormous services backlog that releases only twelve per cent of itself in any given year6.

The risks are specific rather than general. The LEAP's early service history in hot and dusty environments was difficult and required engineering fixes. Long-term service agreements on those engines were priced before that experience, and the company has already recorded unfavourable changes in estimated profitability on long-term service agreements7. And the durability improvement, which is unambiguously right for the customer, reduces the number of visits per engine.

Set shop visit growth against the age of the fleet. Internal shop visit revenue grew thirty per cent in the first half of 20268 on a fleet whose average age is still low. The question this decade will answer is whether that rate holds as the fleet matures, or whether the durability upgrades flatten it.

Moat trajectory: Widening

This is the fastest-improving part of the company and the least dependent on anything going right. LEAP deliveries were 1,802 in 2025 with about 2,000 targeted for 2026 and first-half deliveries up forty-one per cent, into a fleet that has barely begun to generate overhauls.

The number that tests this moat
Reported
LEAP engines delivered since 2016
1,802 in 2025 alone, most never overhauled

Deliveries were 1,570, 1,407 and 1,802 across 2023-2025 with about 2,000 targeted for 2026 and first-half deliveries up 41%. Every one was sold inside an equipment package at a negative gross margin. The question this decade answers is whether shop visit growth holds as the fleet matures and the durability kit cuts over.

Source: GE Aerospace Form 10-K, fiscal year 2025 ↗
⚠ Threats to the moat
⚠ THREAT 01
A Fleet Priced Before Anyone Knew How It Would Wear
A contract signed in 2018 on assumptions made in 2016 governs revenue being recognised today.
References
  1. ReportedGE Aerospace and its partner have delivered 1,570 of them in 2023, 1,407 in 2024 and 1,802 in 2025, with a target of around 2,000 in 2026 and deliveries up forty-one per cent in the first half of that year.
    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 ↗
  2. Third-party estimateGE Aerospace and its partner have delivered 1,570 of them in 2023, 1,407 in 2024 and 1,802 in 2025, with a target of around 2,000 in 2026 and deliveries up forty-one per cent in the first half of that year.
    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 ↗
  3. ReportedGE Aerospace and its partner have delivered 1,570 of them in 2023, 1,407 in 2024 and 1,802 in 2025, with a target of around 2,000 in 2026 and deliveries up forty-one per cent in the first half of that year.
    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 ↗
  4. ReportedEvery one was sold as part of an equipment package carrying a negative gross margin.
    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 ↗
  5. ReportedA modern narrowbody engine typically runs several years before its first removal, and the interval is lengthening: the LEAP-1B durability kit certified in 2026 is expected to deliver roughly two times the time-on-wing.
    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. ReportedIt is also why the reported numbers look strange: revenue growing above twenty per cent, margins contracting, and an enormous services backlog that releases only twelve per cent of itself in any given 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 ↗
  7. ReportedLong-term service agreements on those engines were priced before that experience, and the company has already recorded unfavourable changes in estimated profitability on long-term service agreements.
    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 ↗
  8. ReportedInternal shop visit revenue grew thirty per cent in the first half of 2026 on a fleet whose average age is still low.
    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