GE Aerospace: The Other Engine on the A320neoThin moat

RTX (RTX) — moat facet

On the A320neo Pratt & Whitney's engine is the airline's other choice, and it earns a third of the margin GE Aerospace makes on commercial engines.

On the Airbus A320neo family an airline chooses its engine, and the choice is between Pratt & Whitney's geared turbofan and CFM's LEAP, the joint venture of GE Aerospace and Safran1. GE Aerospace's own page on this contest describes it from the LEAP side; from RTX's side the story is the cost of being the second choice.

Commercial engine segments, 2025 ($M)33,314GE CES revenue32,916Pratt revenue8,861GE CES profit2,596Pratt profitGE Aerospace and RTX Forms 10-K FY2025
The same revenue, a third of the profit.

The recall hurt exactly this contest. Airlines whose A320neos were grounded for inspection were the same airlines deciding their next orders. Pratt & Whitney's answer has been durability: the GTF Advantage is certified and promises to "double the time on wing performance"2.

The price shows in the margins. GE Aerospace's commercial engine segment earned 26.6% on $33,314 million of revenue in 20253; Pratt & Whitney earned 7.9% on $32,916 million45. Some of the difference is recall compensation and a younger fleet, but a rival earning three times the margin can outspend Pratt on discounts, repair capacity and the next engine.

Pratt & Whitney's advantage lies on the aircraft where there is no contest. The A220 is powered only by the GTF, and AirAsia's order for 150 of them in the second quarter of 2026 added a new operator without a competition6.

The market values the two accordingly: GE Aerospace at $331.81 billion and RTX, with a defence business besides, at $255.27 billion78.

The contest will be decided on durability data rather than promises. United Airlines took the first aircraft powered by the GTF Advantage in September 20269, and Pratt & Whitney's durability claims will now be tested in airline service. GE Aerospace's margin advantage gives it room to answer with price if the data favour Pratt.

The ratio to follow is Pratt's margin against GE's. At 7.9% against 26.6% in 2025, a narrowing toward half the gap by 2027 would mean the GTF has recovered its standing; no narrowing would mean the recall permanently repriced it.

Moat trajectory: Holding steady

GTF Advantage certified; margin gap unchanged.

The number that tests this moat
Reported
Pratt & Whitney commercial original-equipment sales growth, latest quarter
-8% (Q2 2026)

New-engine volume where the contest is fought; continued declines while Airbus raises output would mean share lost at the point of sale.

Source: RTX Q2 2026 earnings call transcript ↗
References
  1. Third-party estimateOn the Airbus A320neo family an airline chooses its engine, and the choice is between Pratt & Whitney's geared turbofan and CFM's LEAP, the joint venture of GE Aerospace and Safran.
    The Motley Fool, on GE Aerospace's LEAP deliveries - the LEAP as the sole engine on the Boeing 737 MAX and one of two options on the Airbus A320neo family, Pratt & Whitney's geared turbofan being the other. — August 2026 · publ. 28 August 2026 · source ↗
  2. ReportedPratt & Whitney's answer has been durability: the GTF Advantage is certified and promises to "double the time on wing performance".
    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 ↗
  3. ReportedGE Aerospace's commercial engine segment earned 26.6% on $33,314 million of revenue in 2025; Pratt & Whitney earned 7.9% on $32,916 million.
    GE Aerospace Form 10-K for fiscal 2025 - Commercial Engines & Services segment revenue of $33,314 million and segment profit of $8,861 million, a 26.6% segment profit margin. — FY2025 · publ. January 2026 · source ↗
  4. ReportedGE Aerospace's commercial engine segment earned 26.6% on $33,314 million of revenue in 2025; Pratt & Whitney earned 7.9% on $32,916 million.
    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 ↗
  5. Moat Explorer calcGE Aerospace's commercial engine segment earned 26.6% on $33,314 million of revenue in 2025; Pratt & Whitney earned 7.9% on $32,916 million.
    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.
  6. ReportedThe A220 is powered only by the GTF, and AirAsia's order for 150 of them in the second quarter of 2026 added a new operator without a competition.
    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 ↗
  7. ReportedThe market values the two accordingly: GE Aerospace at $331.81 billion and RTX, with a defence business besides, at $255.27 billion.
    RTX market capitalisation history - year-end values $108.60B (2020), $128.81B (2021), $148.36B (2022), $120.99B (2023), $154.03B (2024), $245.90B (2025), and peer market caps (GE Aerospace $331.81B, Boeing $158.02B, Lockheed Martin $121.09B). — 2020-2026 · publ. September 2026 · source ↗
  8. ReportedThe market values the two accordingly: GE Aerospace at $331.81 billion and RTX, with a defence business besides, at $255.27 billion.
    RTX Corporation (RTX) market data - $189.40 a share at the close on 25 September 2026, market cap $255.27B, revenue (ttm) $93.50B, net income $7.74B, EPS $5.68, 23 analysts with a $234.82 target, 52-week range $155.64-$226.88. — September 2026 · publ. 25 September 2026 · source ↗
  9. ReportedUnited Airlines took the first aircraft powered by the GTF Advantage in September 2026, and Pratt & Whitney's durability claims will now be tested in airline service.
    RTX Corporation (RTX) market data - $189.40 a share at the close on 25 September 2026, market cap $255.27B, revenue (ttm) $93.50B, net income $7.74B, EPS $5.68, 23 analysts with a $234.82 target, 52-week range $155.64-$226.88. — September 2026 · publ. 25 September 2026 · source ↗
Sources
Generated September 28, 2026