The engine makers are reporting the strongest services growth in years while their airline customers absorb a war-driven fuel shock. From 2027, value in the aftermarket is likely to follow the aircraft, customers and contracts that still generate cash.
Andy Demir · 12 October 2026 · 16 min read
Executive Summary
GE Aerospace's $11.75 billion agreement in September to buy the castings maker CPP shows where the engine aftermarket's constraint now sits: in metal and capacity as much as in data. GE, Safran, Pratt & Whitney and Rolls-Royce all reported strong first-half services growth and raised 2026 guidance in July. Their customers are in a different position. IATA expects airline net profit to halve to $23 billion in 2026 as jet fuel averages about $152 a barrel, and the US Energy Information Administration still sees Brent at $105 in the fourth quarter before easing in 2027.
Both signals can hold at once, because work already in the pipeline keeps shops full while fleet decisions reshape the demand behind it. My forward view, held with moderate confidence, is that the twelve months to October 2027 will reward selection by engine family, customer, and contract more than volume, with Europe's hedge roll-off, US airlines' limited hedging, and Asia's fuel-supply exposure moving on different clocks. For the board of an independent engine maintenance provider, the decision worth minuting is to rank its engine portfolio by the customer's economic need and the contract's cash profile, and to run a 90-day trial before committing further 2027 capacity.
In This Essay
- A strong aftermarket meets a weaker customer economy
- How the war changes the maintenance decision
- Europe: industrial depth and airline optionality
- United States: technology meets the material constraint
- Asia: capacity growth under an energy constraint
- Where data becomes economic value
- Why 2027 is likely to reward selection over volume
- A capacity decision that starts with cash
- Questions for the C-Suite and the Board
- References
A strong aftermarket meets a weaker customer economy
On 8 September 2026, GE Aerospace agreed to buy the precision-castings maker Consolidated Precision Products (CPP) from Warburg Pincus and Berkshire Partners for $11.75 billion, financed with $7 billion of cash and new debt. GE values the business at about 18 times CPP's expected 2027 EBITDA, including synergies, and about 26 times without them, and describes the deal as capturing capacity for demand that is rising across commercial engines, the aftermarket, and defence. Completion is expected in the second half of 2027, subject to regulatory approvals. In a market typically described as software- and predictive-maintenance-driven, one of the largest propulsion companies has just written its biggest cheque in years to a foundry (GE Aerospace, 2026b).
The operating results explain why. GE reported Commercial Engines & Services revenue up 32% in the first half of 2026, with record internal shop-visit output in the second quarter, and now expects that services line to grow in the low twenties for the year. Safran, whose CFM International joint venture with GE builds the CFM56 and LEAP engines, reported first-half civil-engine spare-parts sales up 27.9% and services up 40.4%, both in US dollars, with the older CFM56 doing most of the work. Pratt & Whitney's commercial aftermarket sales rose 25% in the second quarter, and Rolls-Royce lifted large-engine MRO output by 13% in the first half. These are different businesses and definitions that cannot be combined into a single growth rate, but all four companies raised their 2026 guidance in July, with the conflict in the Gulf already several months old (GE Aerospace, 2026a; Rolls-Royce, 2026; RTX, 2026; Safran, 2026).
At the customer end of the chain, the picture is less comfortable. IATA's June outlook expects airlines to earn a combined net profit of $23 billion in 2026, roughly half the $45 billion it estimates for 2025, on a net margin of 2.0% and a return on invested capital of 4.3% against an estimated 8.5% cost of capital. It expects jet fuel to average $152 a barrel for the year, up almost 70% in 2025, with the premium of jet fuel over crude at a historic high of $57 a barrel, and passenger demand growth of 2.1% measured in revenue passenger kilometres. The question by October is how long strong supplier results can coexist with pressure on the cash that ultimately pays for them (International Air Transport Association [IATA], 2026).
My reading is that the aftermarket's next competitive advantage will come from connecting these two realities. Engine health, parts availability, shop access, and operating data already matter, and their value becomes clearer when judged against the economics of the aircraft and the airline behind each engine. A repair that returns a productive aircraft to service yields a different outcome than an equally competent repair on an aircraft whose routes no longer cover its costs. A full shop, a profitable customer and a cash-generating contract are three different things. The popular idea of a data-defined aftermarket holds only if it spans the whole chain: data improves a decision, capacity makes it executable, and fleet economics determine whether it creates value.
How the war changes the maintenance decision
The US–Iran war reaches the engine shop through fuel before it reaches the work order. The US Energy Information Administration estimates that crude production shut-in across the Gulf due to disruptions at the Strait of Hormuz peaked at 10.9 million barrels per day in May and was still at 4.8 million in September. Attacks on Saudi Arabia's East-West pipeline, the main route around the Strait, lifted Brent to an average of $114 a barrel in September and $131 on 15 September. For an airline, the crude price is only part of the bill, because refining constraints and the jet crack spread sit on top of it, and in some regions the question is whether fuel can be obtained at all (IATA, 2026; US Energy Information Administration [EIA], 2026).
That matters for 2027 budgets, which most operators and their suppliers are setting now. The EIA's October outlook, released on 6 October with inputs finalised on 1 October, forecasts Brent at $105 a barrel in the fourth quarter of 2026 and an average of $84 in 2027, up from $74 in its September forecast. It assumes that most of the region's production returns to pre-conflict levels by the end of the second quarter of 2027 and that Brent falls to about $74 by the fourth quarter, while warning that short-term prices are likely to be more volatile than its forecast shows. An assumption that moved ten dollars in a month is better treated as a range (EIA, 2026).
Expensive fuel pushes maintenance in two directions at once. IATA reports a backlog of 18,100 aircraft in May 2026, more than half the active fleet, and notes that airlines have extended the life of existing aircraft to cover delayed deliveries, with older fleets requiring more maintenance. An older aircraft may therefore stay in service because no replacement is available, supporting another engine shop visit. The same aircraft can become uneconomic on a marginal route as fuel costs rise, and lower utilisation, parking, or retirement then removes the maintenance demand it would otherwise generate. Higher oil prices increase the value of fuel efficiency, while available aircraft, lease terms, route yields, and cash determine how quickly an operator can act on it (IATA, 2026). Longer routings around closed airspace add flight hours without a corresponding increase in takeoffs and landings, and engine maintenance exposure depends on hours, cycles, and life-limited parts rather than passenger numbers, so long-haul and short-haul customers with similar traffic can generate very different shop demand.
There is also a timing gap. Engines already removed and parts already ordered can keep shops full even as airline economics weaken, so a healthy order book can sit alongside more cautious future workscopes and slower payments. Airworthiness requirements stay fixed; the flexibility lies in scheduling, approved repair options and deployment. Backlog measures work expected to arrive or be completed. Customer liquidity and fleet intentions show which of that work will convert into revenue and cash. In an energy shock, the second view becomes more valuable, without making the first any less important.
Europe: industrial depth and airline optionality
Europe enters this period with deep propulsion engineering and maintenance capability. Safran's first-half results show strong demand for both legacy CFM56 parts and expanding LEAP services. Rolls-Royce says its programme to more than double durability across its in-production engines by the end of 2027 is on track, with the majority of the targeted improvement already delivered. GE reports certification of a LEAP-1B durability kit with an upgraded high-pressure turbine blade, expected to roughly double time on wing, with full production cutover beginning in 2027 (GE Aerospace, 2026a; Rolls-Royce, 2026; Safran, 2026). More repair output improves availability today; greater durability reduces future removals, which helps a provider paid by the flight hour and changes the arithmetic for one that invoices individual repair events.
Airlines can also reshape the architecture. On 10 February 2026, Ryanair and CFM signed a memorandum of understanding for a multi-year engine-material agreement under which Ryanair would buy all its engine spare parts directly from CFM, expecting to spend more than $1 billion a year, and would open two engine shops in Europe from 2029. For thirty years, CFM has maintained Ryanair's CFM56 engines under a power-by-the-hour contract; Ryanair now expects to bring that work in-house. The shops are a plan rather than a capacity, and the agreement is an MoU, but it shows a large airline deepening its relationship with an engine maker while taking greater control over maintenance execution (Ryanair, 2026).
The regional fuel position runs on a different clock. IATA put European airlines' pre-crisis hedging at about 70% of fuel needs and expects higher costs to feed through as those hedges roll off. For a maintenance supplier, a European customer's current fuel bill is therefore an incomplete guide to its position in mid-2027, and the contract portfolio is worth reading alongside the timing of customers' fuel protection (IATA, 2026).
Europe also has a more developed legal framework for access to equipment data. The EU Data Act has applied since 12 September 2025, and the Commission's own guidance lists planes among its examples of connected products and repair and maintenance among the aftermarket services such data can support. The same guidance keeps inferred and derived data out of scope, protects intellectual property, bars the use of the data to build a competing connected product and allows a data holder to refuse access where it can show a high likelihood of serious economic damage from disclosing trade secrets. Its effect on a given engine or agreement needs case-by-case legal assessment (European Commission, n.d.).
The European opportunity lies in combining engineering depth, repair capability, airline scale and clearer data rights. Independent providers can create value through approved repair expertise, reliable turnaround and cooperation across customer fleets. A proprietary software layer is one possible investment; a stronger material flow, an extra test cell or a better-structured customer agreement may return cash sooner.
United States: technology meets the material constraint
GE's services growth and Pratt & Whitney's aftermarket expansion show that US suppliers continue to benefit from fleets in service; they do not show that the airlines operating those fleets are equally protected from the fuel shock. The CPP transaction is revealing in that light. GE identifies castings capacity as important to commercial engines, the aftermarket and defence simultaneously, and CPP itself supplies castings for commercial and military aircraft, weapon systems and industrial gas turbines. My interpretation is that owning an industrial bottleneck can complement owning design and diagnostic capability, because better information about a required intervention has limited value when the replacement part cannot be poured. The deal's eventual effect depends on approval, integration and execution, and it adds no capacity before 2027 (GE Aerospace, 2026b).
US airline exposure also differs from that in Europe. IATA notes that North American airlines have largely moved away from fuel hedging, so higher fuel costs reach their cost base more directly and quickly. Maintenance and parts suppliers may see pricing pressure or changes in fleet plans sooner where customers carry less fuel protection (IATA, 2026).
The industrial effects extend beyond the engine makers. Commercial production, military demand and repair programmes compete for the same specialist processes and materials, and a supplier serving all three may hold an attractive portfolio whose delivery commitments still depend on which resources are shared and how quickly additional qualified output can be added. For capital providers, a capability that remains essential across engine generations has a different horizon than inventory tied to an ageing fleet and deserves a different scarcity premium.
Asia: capacity growth under an energy constraint
Asia's aftermarket story is broader than a single sovereignty narrative. In November 2025, Safran opened in Hyderabad what it describes as its largest LEAP maintenance centre, a €200 million investment due to start operating in 2026 and designed for an eventual 300 LEAP engines a year, employing more than 250 people at launch and up to 1,100 over time. India is CFM's third-largest market, with more than 400 LEAP-powered aircraft in service and more than 2,000 engines on order. The 300-engine figure is a design capacity, and the commercial significance of the site will depend on how quickly training, approvals, and test capabilities ramp up (Safran, 2025).
Singapore offers a complementary model. ST Engineering opened an expansion in September 2025 that is designed to double its Singapore capacity for CFM56 and LEAP engines to more than 300 per year by 2027, and to exceed 400 shop visits per year when combined with its Xiamen facility. Its second-quarter 2026 orders included CFM56 and LEAP engine services for Asia-Pacific and European customers, which ties Asian repair infrastructure to international demand rather than confining it to a home market (ST Engineering, 2025, 2026).
Xiamen is also a reminder that China participates in the existing engine ecosystem. Talk of Chinese carriers leaving Western aftermarket platforms has no public timetable, certified replacement capability or measured revenue exposure behind it today, and local maintenance expansion is a different proposition from a change in propulsion dependence.
The energy constraint is real. IATA points to Asia-Pacific's heavy reliance on Gulf crude imports, which puts acute pressure on refineries and can create jet fuel shortages and higher prices than elsewhere, and notes that carriers are already adjusting capacity. Some Asian airlines are meanwhile gaining Europe–Asia traffic as flows shift away from Gulf hubs, so the same shock helps some operators and burdens others. Proximity creates value only when it shortens the total maintenance cycle, which still depends on qualified staff, approvals, and access to materials and tests (IATA, 2026).
Where data becomes economic value
A maintenance prediction becomes commercially useful when it changes what happens next. Knowing that an engine will need attention can support an earlier parts order, a better-placed shop slot, a spare-engine allocation and a less disruptive change to the flying programme. The return comes from that combined outcome rather than from the volume of data collected.
That return can be tested without assuming a universal margin multiplier. Earlier warning may cut emergency logistics, reduce the days an engine waits for material, or avoid an unplanned grounding, and each of these can be measured against the system's cost, the accuracy of its recommendations, and the effort needed to act on them. Rolls-Royce, for example, says it is now using AI tools for workscope prediction and shop-visit scheduling to reduce turnaround times and shop-visit costs; the test of these tools lies in those two metrics (Rolls-Royce, 2026).
Control is also more distributed than the platform narrative suggests. The engine maker brings design knowledge and parts, the airline decides routes and deployment, the maintenance provider brings approved capability, and the lessor brings asset and lease terms; collecting data does not confer authority over all of those decisions.
The contract model matters as much as the data. Under an agreement priced per flight hour, reduced flying can cut receipts before maintenance obligations kick in, while improved durability may lower costs later. A time-and-materials provider has the opposite exposure: fewer events reduce revenue, while a deeper work scope increases the value of each visit.
The decisive questions are therefore practical: who may use the data, how good the recommendation is, whether the resources to act exist and who keeps the savings. An excellent prediction creates little value if the part is missing, the decision comes too late, or the contract gives the benefit to someone else.
Why 2027 is likely to reward selection over volume
For the twelve months to October 2027, I consider a more selective aftermarket more likely than a uniform expansion across all engine families and providers, with moderate confidence. Existing maintenance requirements, a large installed fleet and a shortage of replacement aircraft support demand. Expensive fuel and thinner airline cash create counter-pressure through utilisation, retirement and workscope decisions. The differences between customers and engine families are likely to matter more than any aggregate growth figure.
The central case assumes that oil flows recover broadly along the EIA's October path and that airlines absorb part of the cost shock through fares and operational changes, as IATA expected in June. Maintenance demand then remains substantial, but buyers place more value on predictable turnaround times, approved repair alternatives, and fewer spare-engine days, and some customers become more careful about the timing and financing of each shop visit.
The downside case combines prolonged disruption to Gulf flows with weaker travel demand and slower aircraft deliveries. Its effects would be uneven: some older aircraft remain indispensable while others lose the economic case for another heavy shop visit, and a maintenance business could see full near-term slots alongside softer future bookings, harder contract negotiation and slower collections. In the upside case, lower fuel, better parts flow and more deliveries let airlines fly, and shops work faster, while emergency premiums ease.
The strongest argument against this view deserves its own hearing. The aircraft shortage may simply overwhelm the fuel shock: with a backlog above half the active fleet, almost every airworthy aircraft has a use, Rolls-Royce still expects large-engine flying hours at the lower end of 115% to 120% of 2019 levels, and every major engine maker raised guidance in July with the conflict well underway. If that holds, demand stays broad and selection matters less. I take the argument seriously. My lean remains selective growth, because the shortage protects the number of aircraft flying more reliably than it protects the cash of the airlines flying them, and the trade-off for a provider is between filling capacity now and holding it for the customers most likely to pay on time (IATA, 2026; Rolls-Royce, 2026).
The signals worth watching are close. Safran reports third-quarter revenue on 23 October and full-year results on 9 February 2027; the other engine makers report in the same windows; the EIA revises its oil path every month; European hedges continue to roll off through 2027; and the LEAP-1B durability cutover begins at the start of the year. Confirmation would come from widening gaps between portfolios in utilisation, approved workscopes and days to collect payment. The clearest falsifier would be sustained growth in utilisation and cash collection across both older and newer engine portfolios together with broad improvement in airline profitability. Providers with long-term agreements on durable new-generation engines and customers with strong balance sheets stand to gain most from selection; event-based businesses concentrated on marginal operators of older aircraft carry the most exposure (Safran, 2026).
Beyond 2027, durability and the new maintenance footprint matter more. Fewer interventions per engine can coexist with a larger installed fleet, so these milestones do not indicate when engine maintenance demand peaks.
A capacity decision that starts with cash
My counsel here is addressed to the board of an independent engine maintenance provider, or a tier-two repair and parts supplier, serving CFM56 and LEAP fleets and weighing further capacity for 2027. The opportunity I would examine now is to complement the demand forecast with a view of the engine populations behind it before the next capacity commitment.
If I were part of that discussion, the decision I would suggest the board minute is simple: before approving additional shop capacity for 2027, management brings a portfolio view of the engines it serves, ranked by the customer's economic need to keep them flying and by the cash profile of each contract, and runs a 90-day trial on the strongest segment. That evidence would sit alongside, and might reprioritise, a capacity request built on the current order book.
The first 90 days would bring engineering, operations, commercial and finance colleagues around one limited customer-and-engine portfolio, jointly owned by the chief operating officer and chief commercial officer, with the finance director owning the measures. The trial would test an earlier material reservation or a revised planning arrangement with two or three customers. By six months, the measures that matter would be total turnaround time, days waiting for parts, spare-engine days, work in progress, and days to collect payment. By twelve months, capital would follow the evidence: physical investment where a missing process, test capability or material source is the constraint; better data integration where planning is the gap; deposits, milestone payments or jointly held inventory where working capital is the limit.
I would not put a percentage on the economic improvement before the trial, but its shape can be shown. On illustrative numbers, a business carrying $60 million of engines and material in work in progress on a 90-day cycle releases roughly $6.7 million of cash for every ten days taken out of that cycle, before any effect on revenue from faster slots or on customer retention from more reliable delivery. The indicators to track are working capital, delivery confidence and the share of revenue from customers whose aircraft are central to their profitable routes.
Waiting has a cost that is less visible than idle capacity. Capacity approved on the strength of the 2026 order book may arrive in 2028, after durability improvements have reduced removals per engine on the newest fleets and after material suppliers have allocated output to others. The window is now because 2027 budgets, customer contracts and supplier allocations are being set over the coming quarter, while the fuel path is still moving.
The trade-off is real. More reserved stock consumes cash, protected slots reduce flexibility, and deeper partnerships create obligations on both sides. I would advise differently if, by the first quarter of 2027, utilisation and collections improve together across both legacy and new-generation fleets; in that case, broader capacity expansion would be the better use of capital. Sales, procurement, operations and finance each run on a different clock, and alignment is easier when the portfolio, assumptions and ownership are explicit.
GE has chosen to pay a premium for the metal engines are made of, because the information about when an engine needs attention is of little value without the part to act on it. For the rest of the aftermarket, the equivalent asset is quieter: knowing which engines, customers and contracts will still be generating cash in 2027, and building capacity around them.
Questions for the C-Suite and the Board
Which engine populations in our portfolio have the strongest economic reason to keep flying in 2027? The chief commercial officer can link expected shop visits to each customer's utilisation, route economics, and replacement plans, showing where capacity serves durable demand.
Where would a shorter total maintenance cycle create the most customer value? Operations leaders can compare days spent waiting for materials, external repairs, testing, and approvals with days of productive work, and the gap usually points to the most impactful investment.
How does lower flying change receipts and obligations under our flight-hour agreements? The CFO can model how revenue falls relative to committed work, showing how much working capital a dip in utilisation would absorb.
Which data-sharing arrangement would enable one specific operational saving? Starting from the decision and the saving, and only then the rights, safeguards and responsibilities, keeps a data programme tied to cash.
Where could a closer airline, engine-maker or supplier partnership improve cash and delivery confidence? Material reservations, deposits and agreed planning windows each trade customer value, flexibility and funding differently, and the business-unit leader closest to the customer is best placed to judge which fits.
Which signal would change our 2027 capacity plan first? The CEO and CFO can agree a small set of triggers in fuel, utilisation, workscope approvals and collection days, each with a named owner and a proportionate response.
References
European Commission. (n.d.). Data Act explained. Retrieved October 12, 2026, from https://digital-strategy.ec.europa.eu/en/factpages/data-act-explained
GE Aerospace. (2026a, July 16). GE Aerospace announces second quarter 2026 results [Press release]. https://www.geaerospace.com/news/press-releases/ge-aerospace-announces-second-quarter-2026-results
GE Aerospace. (2026b, September 8). GE Aerospace to acquire Consolidated Precision Products (CPP), expanding mission-critical castings capacity [Press release]. https://www.geaerospace.com/news/press-releases/ge-aerospace-acquire-consolidated-precision-products-cpp-expanding-mission-critical
International Air Transport Association. (2026, June 7). Middle East disruptions and high fuel prices halve airline industry profitability [Press release]. https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability/
Rolls-Royce. (2026, July 30). Rolls-Royce Holdings plc 2026 half-year results [Press release]. https://www.rolls-royce.com/media/press-releases/2026/30-07-2026-rr-holdings-plc-2026-half-year-results.aspx
RTX. (2026, July 23). RTX reports Q2 2026 results [Press release]. https://www.rtx.com/news/news-center/2026/07/23/rtx-reports-q2-2026-results
Ryanair. (2026, February 10). Ryanair and CFM agree multi-year, multi-billion-dollar engine material services agreement [Press release]. https://corporate.ryanair.com/news/ryanair-and-cfm-agree-multi-year-multi-billion-dollar-engine-material-services-agreement/
Safran. (2025, November 26). Safran accélère son développement en Inde dans l'aéronautique civile et militaire, et renforce son engagement pour le « Make in India » [Press release]. https://www.safran-group.com/fr/espace-presse/safran-accelere-son-developpement-inde-aeronautique-civile-militaire-renforce-son-engagement-make-2025-11-25
Safran. (2026, July 28). Safran reports its first-half 2026 results [Press release]. https://www.safran-group.com/pressroom/safran-reports-its-first-half-2026-results-2026-07-28
ST Engineering. (2025, September 15). ST Engineering strengthens global aerospace support with increased engine MRO capacity [Press release]. https://www.stengg.com/en/newsroom/news-releases/st-engineering-increased-engine-mro-capacity-to-strengthen-global-aerospace-support/
ST Engineering. (2026, August 7). ST Engineering reports 2Q2026 new order wins [Press release]. https://www.stengg.com/en/newsroom/news-releases/st-engineering-reports-2q2026-new-order-wins/
US Energy Information Administration. (2026, October 6). Short-term energy outlook: October 2026. https://www.eia.gov/outlooks/steo/archives/oct26.pdf
About Andy Demir
Andy Demir is the editor of SwissTechnic and writes on strategy, international growth and capital in aerospace, defence, space and advanced technology. Drawing on a career in commercial leadership, the analysis examines how technology, sovereignty and industrial capability shape competitive power and long-term value.
