A Fifty-Fifty Joint Venture, Not ConsolidatedNarrow moat

GE Aerospace (GE) — moat facet

A company consolidates what it controls, and GE Aerospace does not consolidate CFM.

The accounting treatment is the tell. CFM International is described in GE Aerospace's own filing as a fifty-fifty non-consolidated joint venture with Safran Aircraft Engines1. A company consolidates what it controls; GE Aerospace does not consolidate CFM, because it does not control it.

Equity method and related segment income, in $m4842023548202467720258,861CES segment profit 2025The credit sits in other segment expenses (income) and is small against the segment it sits in.
A company consolidates what it controls, and GE Aerospace does not consolidate CFM.

The practical consequence is that the revenue and profit of the programme behind three quarters of GE Aerospace's commercial deliveries do not flow through its income statement as revenue and profit. Equity method income, along with interest income and licensing and royalty income, sits in other segment expenses (income) — a credit of $677 million in the Commercial Engines & Services segment in 2025, against $548 million in 2024 and $484 million in 20232.

That line is worth noticing for what it is not. It is a small credit inside a segment that earned $8,861 million3. Most of what GE Aerospace earns from CFM engines arrives not as joint-venture profit but as GE's own share of the work: the hot section it designs and builds, the spare parts it supplies, and the overhauls it performs in its own shops. The venture is a marketing and assembly structure over a division of industrial labour.

The strategic consequence is sharper. A fifty-fifty partnership with no controlling party means every material decision — the next engine, the production rate, the pricing architecture, the aftermarket split — requires agreement. It has worked since 1974, through three engine generations, which is strong evidence that it will keep working. It is not a guarantee.

What would change the position is a change of intent on either side. Safran is a listed company with its own shareholders and its own strategy, and it does not need GE Aerospace's permission to reconsider.

One small line carries it: equity method income of $677 million in 2025, rising from $484 million two years earlier4. It tells you the venture is growing. It does not tell you who decides what it does next.

Moat trajectory: Holding steady

Equity method income and related items inside Commercial Engines & Services rose from $484 million in 2023 to $677 million in 2025, so the venture is growing. The governance has not changed and there is no indication either partner wishes it to.

The number that tests this moat
Reported
Equity method and related segment income
$677M in 2025, from $484M in 2023

Recorded within other segment expenses (income) in Commercial Engines & Services, against segment profit of $8,861M. It is the only public window onto half of GE Aerospace's largest franchise, and it tells you the venture is growing without telling you who decides what it does next.

Source: GE Aerospace Form 10-K, fiscal year 2025 ↗
⚠ Threats to the moat
⚠ THREAT 01
Every Decision Needs a Partner to Agree
The launch of the next narrowbody engine requires two boards, in two countries, to agree at the same moment.
References
  1. ReportedCFM International is described in GE Aerospace's own filing as a fifty-fifty non-consolidated joint venture with Safran Aircraft Engines.
    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 ↗
  2. ReportedEquity method income, along with interest income and licensing and royalty income, sits in other segment expenses (income) — a credit of $677 million in the Commercial Engines & Services segment in 2025, against $548 million in 2024 and $484 million in 2023.
    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 ↗
  3. ReportedIt is a small credit inside a segment that earned $8,861 million.
    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 ↗
  4. ReportedOne small line carries it: equity method income of $677 million in 2025, rising from $484 million two years earlier.
    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 ↗
Sources
Generated September 23, 2026