Aftermarket: $1.4 Billion of Collins's 2025 GrowthNarrow moat

RTX (RTX) — moat facet

Collins earns most of its growth from parts that wear out on aircraft it sold years ago, and that aftermarket lifted its margin to 16.3%.

Collins's best business is the one that follows its equipment into service. Of its $2.6 billion of organic sales growth in 2025, "higher commercial aerospace aftermarket sales of $1.4 billion" was the largest part, ahead of defence at $0.7 billion and commercial original equipment at $0.5 billion1. The filing attributes the aftermarket rise to "higher volume across all aftermarket sales channels"2.

Collins organic sales growth by source, 2025 ($bn)1.4Commercial aftermarket0.7Defence0.5Commercial OEMRTX Form 10-K FY2025, segment review
More than half of the growth from the aftermarket.

Collins sells brakes, landing gear, seats, galleys, oxygen, avionics, nacelles and power systems3. Many of them wear out on a schedule tied to flying, not to new aircraft deliveries. A brake is replaced by landings; a seat is refurbished; an avionics suite is upgraded. The customer who bought the aircraft years ago keeps paying.

That annuity is what lifted the margin. Collins earned 16.3% in 2025 against 14.6% in each of the two prior years4. The company said its profit rose on the higher volume, partly offset by tariffs and unfavourable commercial original-equipment mix5.

It also has a service contract business that looks like an engine maker's. In the second quarter of 2026 Collins signed a five-year agreement to provide maintenance for engine nacelles on Air New Zealand's full 787 fleet6.

The aftermarket is cyclical in the short run, because it follows flying hours. In the long run it is the most defensible thing Collins sells, because its parts are certified on the aircraft.

The 2024 figures tell the same story. Of Collins's $2.1 billion of organic growth that year, $1.2 billion came from the commercial aftermarket, driven by "continued growth in commercial air traffic"7. Two years running, the parts that wear out produced more growth than the parts that are fitted new.

The segment's commercial aftermarket growth was 10% in the second quarter of 20268. A slowdown well below flying-hour growth, without a fall in travel, would mean customers are buying the parts elsewhere.

Moat trajectory: Widening

Aftermarket +$1.4bn of $2.6bn organic growth in 2025.

The number that tests this moat
Reported
Collins commercial aftermarket growth, latest quarter
+10% (Q2 2026)

The annuity behind Collins's margin; growth well below flying hours without a travel slump would mean share lost to other parts suppliers.

Source: RTX Q2 2026 earnings release ↗
⚠ Threats to the moat
⚠ THREAT 01
Tariffs Land on Collins First
Collins pays tariffs on parts it sells under long original-equipment contracts, and RTX does not say how much they cost.
References
  1. ReportedOf its $2.6 billion of organic sales growth in 2025, "higher commercial aerospace aftermarket sales of $1.4 billion" was the largest part, ahead of defence at $0.7 billion and commercial original equipment at $0.5 billion.
    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 - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  2. ReportedThe filing attributes the aftermarket rise to "higher volume across all aftermarket sales channels".
    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 - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  3. ReportedCollins sells brakes, landing gear, seats, galleys, oxygen, avionics, nacelles and power systems.
    RTX Form 10-K for fiscal 2025 - Item 1 business: the three segments and their products, the GTF family powering more than 2,600 aircraft for over 90 operators, the F135 as sole-source engine on all F-35 variants, GTF Advantage certification, the IAE collaboration shares, employees (about 180,000 in 52 countries, 69% in the U.S.) and the divested businesses. — FY2025 · publ. 6 February 2026 · source ↗
  4. ReportedCollins earned 16.3% in 2025 against 14.6% in each of the two prior years.
    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 - Collins Aerospace: segment sales, operating profit, organic drivers, customer types, assets and capital expenditure. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  5. ReportedThe company said its profit rose on the higher volume, partly offset by tariffs and unfavourable commercial original-equipment mix.
    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 - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  6. ReportedIn the second quarter of 2026 Collins signed a five-year agreement to provide maintenance for engine nacelles on Air New Zealand's full 787 fleet.
    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. ReportedOf Collins's $2.1 billion of organic growth that year, $1.2 billion came from the commercial aftermarket, driven by "continued growth in commercial air traffic".
    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 - Collins Aerospace: segment sales, operating profit, organic drivers, customer types, assets and capital expenditure. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  8. ReportedThe segment's commercial aftermarket growth was 10% in the second quarter of 2026.
    RTX second-quarter 2026 earnings release, Form 8-K exhibit 99 - sales of $24.7 billion, segment results, cash flow, balance sheet and raised 2026 outlook. — Q2 2026 · publ. 23 July 2026 · source ↗
Sources
Generated September 28, 2026