GE Aerospace's Explosive Growth: What's Really Driving the Gains?

The Foundation: Unmatched Market Dominance

GE Aerospace’s remarkable 85% stock appreciation in its debut year as a standalone entity reflects far more than market sentiment—it underscores the company’s commanding position in commercial aviation. The aerospace giant powers 3 out of every 4 commercial flights globally through its engines or CFM International joint venture, a duopoly that translates into decades of predictable, high-margin revenue streams.

The LEAP engine serves as the exclusive powerplant for Boeing’s 737 MAX and ranks among two premier choices for Airbus’s A320neo family—the industry’s most-produced aircraft platforms. Meanwhile, the legacy CFM56 continues powering older 737 and A320 variants that remain economically viable for carriers worldwide.

The Razor-and-Blade Economics That Made the Difference

GE Aerospace operates on a proven playbook: engines generate modest upfront margins while catalyzing decades-long service contracts worth billions. A single engine can remain in operation for 40+ years, creating recurring revenue tailored perfectly to long-term investor horizons.

What elevated performance in recent years? The surge in global flight departures post-pandemic recovery has triggered explosive demand for engine maintenance and component replacements. Airlines accelerated service intervals on aging CFM56-equipped aircraft while awaiting new LEAP-powered planes, creating an unexpected revenue sweet spot that exceeded analyst expectations.

Supply Chain Thaw Opens New Growth Windows

The persistent supply chain bottlenecks that constrained LEAP engine production are loosening. Material availability—the critical constraint—continues normalizing, enabling GE to accelerate delivery schedules for its next-generation engines.

This inflection point matters substantially. Management projects double-digit annual revenue expansion from 2025 through 2028, with earnings per share climbing from approximately $6.10 to $8.40 across that interval. More importantly, LEAP-engine service revenues are beginning to compound—the emerging high-margin layer on top of legacy CFM56 maintenance income.

The Path Ahead: Where Margin Expansion Waits

Near-term margin pressure is inevitable as LEAP deliveries ramp—new engines carry lower unit economics than services revenue. However, this inverted cost structure proves temporary. As the installed base of LEAP engines matures, the services revenue multiple accelerates, reshaping the earning profile upward.

The combination of market dominance, favorable order visibility, and supply chain normalization positions GE Aerospace for sustained capital appreciation. For investors with conviction in aerospace demand durability, the thesis remains intact—and the best service revenue chapters may still be ahead.