By Chris Sloan

July 17, 2025, © Leeham News: GE Aerospace posted a standout second quarter and first half of 2025, with Q2 profit up 65% to $2.4bn, total revenue climbing 21% to $11.0bn, and profit margin rising to 21.7%, up from 15.9% a year ago—a 37% improvement. The company paired its earnings release with a comprehensive Deep Dive Investor Update, initially slated for the Paris Air Show but postponed following the Air India crash.

“We’re proud to be underway on three out of every four commercial flights,” said Chairman and CEO Larry Culp. “CES (Commercial Engines & Services) has more than 49,000 engines in service and growing.”

The strong quarter was driven by three commercial tailwinds: a 29% surge in services revenue, a 45% increase in total commercial engine units, and a record-breaking order for more than 400 GE9X and GEnx engines from Qatar Airways—the largest widebody engine deal in GE’s history.

GE9X: The Long Wait Nears an End

After years of delays tied to the Boeing 777X program, GE Aerospace is finally preparing for the entry into service of the GE9X engine—the most advanced and most tested engine in the company’s history. Certification of the Boeing 777-9, the first variant of the 777X, is now expected by year-end, with entry into service (EIS) planned for the first quarter of 2026.

Culp underscored the engine’s extensive validation process: “The GE9X is the most tested engine in GE Aerospace history, with more than 30,000 test cycles and 8,000 endurance cycles. We’ve got over 1,600 hours specifically in hot and harsh environments,” Culp said. “The equivalent of six years of commercial flying. Drawing on our GEnx and LEAP experience, this is the first time we’ve completed dust testing prior to launch, which has informed product enhancements such as the second iteration of the HPT blades. Importantly, we’re ensuring that the GE9X is as close to maturity as it can be at launch.”

Culp said customer sentiment remains positive. “We’re encouraged by what we hear from customers. Witness the 60% win rate versus the competition. We’ve got over a thousand engines now in backlog, so the market really wants to see this.”

That demand has been reaffirmed by major widebody engine deals in 2025. Qatar Airways ordered more than 400 GE9X and GEnx engines—the largest widebody engine commitment in GE’s history—and Air India placed a firm order for 20 777-9s powered by GE9X engines. Boeing’s 777X backlog stood at 481 aircraft as of June 30, all exclusively powered by GE.

GE shipped its first GE9X engines to Boeing last year and is ramping deliveries in the second half of 2025. “These are initial shipments—a good kind of the highest losses,” said CFO Rahul Ghai. “So we do expect a couple of hundred million dollars of profit headwind in ’25. That is no change to prior expectations.”

Cost reduction is central to the company’s profitability plan. “We expect to take about 30% of the cost out by the time we hit the 50th unit,” Ghai said. “Another 30% out by the time we get to the 250th engine.”

Ghai confirmed the peak-loss phase will extend beyond entry into service. “We’ll start moving past peak losses, which we expect a year after EIS,” he said. “As we think about the ’28 guidance that we provided, the losses per engine start to come down, but since the volume is still growing, we do expect the losses to be a few hundred million dollars higher in ’28 versus where we are in ’25.”

Long-term, GE expects the GE9X to follow a similar path to LEAP. “We expect the program to get profitable as we get into the 2030s,” Ghai said.

LEAP: Deliveries Climb as Retrofit Cycle Begins

GE Aerospace’s highest-volume commercial engine program continued its upward trajectory in the second quarter, with LEAP new engine deliveries rising 38% year-over-year. For the first half of 2025, deliveries are up 10%, and the company reaffirmed its full-year outlook of 15%–20% growth.

“We’re still confident around our deliveries for this year,” said Culp. “There is no change in that outlook here in ’25. I think we’re on a path to deliver 2,500 LEAPs in 2028.”

The LEAP engine, which entered service in 2016, now has more than 9,000 units in operation across the Airbus A320neo (LEAP-1A) and Boeing 737 MAX (LEAP-1B) fleets. GE and its partner, Safran, say the engine’s maturity is accelerating, driven by lessons learned from GE’s widebody programs and applied to narrowbody operations.

“We’re the only engine manufacturer able to leverage extensive widebody experience for a narrowbody engine,” Culp said. “That’s accelerated the learning curve, getting to mature time-on-wing faster.”

To that end, a significant reliability milestone was reached with the release of the LEAP-1A durability kit, which includes an upgraded high-pressure turbine (HPT) blade. Certified late last year, the kit is now fully incorporated into all new engine deliveries and shop visits. Culp said the improvement will more than double the time-on-wing for the -1A variant, matching the CFM56’s performance, which has long been considered the industry benchmark.

CFO Ghai added that “LEAP 1A delivery is now at CFM56 levels,” underscoring the significant step change in durability.

A similar retrofit process is underway for the installed fleet. In response to a question from Melius Research analyst Scott Mikus, Culp confirmed that retrofitting the 9,000-plus LEAP engines already in service will take time. “We’re not going to go out necessarily and try to upgrade everybody overnight. That will be a multi-year process as the fielded engines come in for their next shop visit. So think years, not months,” he said.

Certification of the LEAP-1B durability kit is expected in the first half of 2026, with phased integration following the same pattern—first into production, then into the aftermarket, and eventually across the in-service fleet as shop visits occur.

As the fleet grows—GE expects the LEAP installed base to triple by 2030—the company is also seeing financial performance line up with expectations. “Very pleased with how LEAP is progressing,” Ghai said. “We’re hitting our key milestones both on financial performance and operational performance.”

The LEAP program is on track to break even this year, as planned. “We’ve always targeted the program to break even this year, and that’s on track. We expected OE to break even next year—that’s on track,” Ghai said. “And the share has been higher than what we expected.”

GEnx: Durability Drives Widebody Dominance

The GEnx engine continues to build on its position as the market leader on the Boeing 787, powering more than 60% of the global fleet, well ahead of Rolls-Royce’s Trent 1000. With the 787 now the best-selling widebody in commercial aviation history, the GEnx’s durability and time-on-wing performance have become a key differentiator in GE’s widebody portfolio.

“We launched the platform back in 2011,” said CEO Larry Culp. “And released our durability package back in 2021. This resulted in a more than 2.5-times increase in time on wing, supporting increasing utilization.”

GE’s durability improvements have translated directly into long-haul reliability, particularly in challenging operating environments. “Today, the fleet leader in hot and harsh environments is approaching 4,000 cycles and still running,” Culp said. “This means customers are keeping engines on wing about five years between shop visits—and even longer in neutral environments.”

This time-on-wing performance has become a critical selling point in recent widebody competitions. “It’s been a differentiator for us in the marketplace,” Culp said. That differentiation has paid off: since 2023, GE Aerospace has maintained a win rate of over 90% on 787 engine selections.

On the RISE: Open Fan Powers GE’s Next Narrowbody Vision

“We’re all in on Open Fan,” Culp said. “Making the investments today in all the underlying technology components that are going to deliver on that next-generation narrowbody propulsion platform that the industry will need.”

The CFM RISE program—short for Revolutionary Innovation for Sustainable Engines—is GE’s most ambitious and transformative propulsion development effort in years. Designed around an unducted open fan architecture, RISE targets at least a 20% reduction in fuel burn compared to today’s LEAP engines, with a focus on safety, durability, and efficiency.

“To date, we’ve completed over 350 program tests with an early focus on durability,” Culp said. “This includes advancing new HPT blade cooling technology and testing full-size fan blades, along with more than 3,000 endurance cycles.”

RISE shifts the efficiency equation away from thermal loads and toward fan system performance. “It’s open fan architecture gains efficiency through the fan system rather than the core,” Culp said. “This reduces the need to push the core to higher temperatures as much as the ducted engine—key driver of today’s engine removals.”

On safety, GE is building on its experience with composite fan blades. “The open fan will spin slower—at 60% the speed of a traditional jet engine,” Culp said. “This helps provide a safe flying experience, even without a nacelle. And we also expect it will result in a quieter engine than today’s LEAP.”

Durability is central to the program. “We’re focusing not only on that propulsive efficiency gain, but also durability,” Culp said. “To be able to again leverage everything that we’ve done, not only in predecessor widebody platforms, but narrowbody here as well, I think just sets us up to have confidence to go with this architecture.”

CFM and Airbus continue to collaborate on engine and airframe integration, with ground and flight tests planned for later this decade. Culp reiterated that this is a long-term play: “More to come. This is a multi-year effort—ground test, flight test, all of that.”

RISE is being shaped not just by technology, but by evolving airline priorities. “When you combine that with what we’re hearing from so many in the industry,” Culp said, “who understand the pivot to relying more on propulsive than thermal efficiency, we see the open fan as the most promising path to accomplish this step change in efficiency.”

Tariffs: Managing Through a $500m Headwind

Tariffs remain a substantial cost burden for GE Aerospace in 2025, though the company says its mitigation efforts are on track.

“Heightened tariffs are resulting in additional costs for us and our supply chain,” said CFO Ghai. “We are continuing to make progress on our operational plans to reduce the impact.”

Assuming reciprocal tariffs between the U.S. and China resume after the current pause, GE expects the full-year impact to be significant. “We still expect the net impact of tariffs to be roughly $500m in 2025,” Ghai said.

On the aftermarket side, conditions are currently more favorable. “With the absence of reciprocal tariffs in China, thus far, we currently see reduced risk for spare engines and spare part deliveries,” he added.

Despite the trade friction, the company reaffirmed its strong full-year outlook. “We expect to grow operating profit by over $1bn for the second year in a row, with free cash flow conversion remaining solid at about 100%,” Ghai said.

Culp also weighed in on the broader policy environment: “Broadly speaking, we support promoting free and fair trade, including the duty-free environment that has long fueled the U.S. aerospace sector, leading to more than 1.8 million U.S. jobs and a $75bn annual trade surplus.”

Flight Deck Drives Steady Gains in Supply Chain Stability

GE Aerospace says its supply chain performance continues to improve, supported by its FLIGHT DECK operating system and a new organizational structure implemented earlier this year.

“I think we’re really encouraged by what we’re able to do with FLIGHT DECK,” said Culp. “And as a function of this organizational construct that we put in place earlier this year, let alone what we’re seeing from an input perspective from suppliers.”

Culp contrasted the current environment with the challenges the company faced just a year ago. “I can remember vividly a year ago, when we weren’t necessarily getting what we needed in terms of volume. But the variability around delivery to expectations—to commitments—was all over the place. And that’s just hard enough to ramp. But when you don’t have that visibility, that certainty, it’s even harder.”

He pointed to a measurable improvement in supplier execution. “That’s why we call out not only the 10% sequential improvement first quarter to second quarter, just in sheer volume that we’re getting from our critical suppliers,” Culp said. “We’re really talking about 12 companies across 18 sites delivering on their commitments in the 95% range.”

But the cultural shift may be even more meaningful than the metrics. “Frankly, what I’m most excited about you don’t see in these numbers—we see it day in, day out,” Culp said. “Just the way our supply chain, our engineering, and our quality teams have come together to be quicker, to be deeper in our technical problem solving, and to have, frankly, a higher level of expectation with respect to countermeasures—both short and long term.”

Culp said the company is striving to become a preferred customer across the global supply base. “Outside of our earshot, our suppliers would hopefully tell you that they’re working with a different GE Aerospace,” he said. “That we’re more constructive, we’re more collaborative. We want to be their best customers, right? Because we know there’s no way we serve the airlines and the airframers who depend on us without having the best possible supply base in the world.”

Financials: Blow-Out Quarter Lifts Full-Year and 2028 Outlook

The propulsion maker delivered a strong second quarter, driven by Commercial Engines & Services (CES), and raised its full-year and long-term guidance. Total company revenue rose 21% year-over-year to $11.0bn, with profit up 65% to $2.4bn. First-half revenue increased 16% to $21.0bn, while profit climbed 35% to $4.6bn. Profit margin for the second quarter was 21.7%, up from 15.9% a year ago.

CES was the standout performer, with second-quarter revenue of $8.0bn, up 30% year-over-year. Services rose 29%, driven by strong spare parts demand and internal shop visits. Equipment revenue grew 35% as volume and price more than offset mix. CES profit increased 33% to $2.2bn, with a segment margin of 27.9%. GE reaffirmed its 2025 outlook for CES to deliver $8.0–$8.2bn in operating profit, representing a roughly $1bn increase over 2024.

Analyst reaction was upbeat. “Blow-out performance,” wrote Robert Stallard of Vertical Research Partners. “Revenues of $10.3bn were well ahead of our estimate of $9.8bn, with Commercial Engines enjoying spectacular 30% YoY growth.”

In response to the strong first half, GE raised its 2025 guidance for total revenue growth to the mid-teens and operating profit to a range of $8.2–$8.5bn, up from $7.8–$8.2bn in April. It also lifted its 2028 outlook, now projecting $11.5bn in operating profit, a $1.5bn increase from the prior Investor Day target.

“GE’s forecast for $11.5bn of op profit for 2028 was at the lower end of what we think the market was looking for,” wrote J.P. Morgan’s Seth Seifman. “But with sales to grow double-digits and margin rate to expand off 2024 despite mix headwinds, it’s hard to quibble much.”

“Compared to our 2024 Investor Day outlook, this represents an increase of more than a billion dollars in operating profit,” said CEO Larry Culp. “Importantly, we expect this momentum extends into 2028, with operating profit growing more than $3bn versus ’25.”

There was considerable news around the key services segment, which we will cover in-depth in an upcoming post.