GE Aerospace (GE) Morgan Stanley's 14th Annual Laguna Conference summary

Commercial momentum and technology advancements

• Secured 1,800 new engine orders at Farnborough, including a record IndiGo LEAP-1A order and a 100-engine deal with Korean Air.

• Achieved first-ever hybrid electric commercial flight between the U.S. and U.K. in partnership with BETA Technologies and Boeing.

• Announced largest acquisition as a standalone company with CPP, aimed at expanding capacity and accelerating new airfoil technology.

• CPP acquisition expected to deliver $200 million in synergies by year three, doubling by year six, and be EPS and free cash flow accretive in year one.

• Air traffic growth resumed in July and August after a dip in Q2, with airline fleet retirements down 10% year-over-year.

Services and aftermarket outlook

• Services expected to grow 20%+ in 2026, supported by a $170 billion backlog and strong shop visit demand.

• Double-digit services growth projected through 2027, with incremental upside possible due to pent-up demand and shop visit delinquency.

• CFM56 retirements remain low at 1.5%-2%, with stable work scopes and high shop visit volumes (2,400 expected annually).

• Demand for CFM56 engines extends beyond aviation, with power generation sector driving additional demand.

• Revenue from CFM56 expected to remain stable through 2028, with growth beyond due to pricing and work scope changes.

LEAP and wide-body engine programs

• LEAP durability kits introduced, doubling time on wing and aligning with financial models; shop visits to grow 25% annually through 2030.

• LEAP profit expected to match CFM56 by 2030, with installed base doubling between 2025 and 2030.

• Third-party shop visits for LEAP projected to reach 30% by 2030, supporting margin expansion.

• New airfoil technology from CPP not yet factored into margin outlook, offering further upside.

• GEnx installed base to double by 2030, with higher pricing and increased shop visit work scope driving profitability.