Opinion: Engine-Makers Gain From Aerospace Earnings Divide

There is a new gatekeeper in the commercial aerospace industry. AlixPartners’ annual industry profit pool analysis finds that engine OEMs and aircraft lessors remained dominant in 2025, but materials providers further down the supply chain have growing financial muscle. All three share a crucial role in creating and providing the capacity required for continued traffic growth.

The profit pool winners and losers in 2025 mirror those of the previous year. Engine-makers and lessors captured 85% of industry earnings, which climbed 19% from a year earlier to $38 billion. Aircraft OEMs remain near break-even, while aerostructures suppliers are still mired in losses.

So 2025 marks a victory lap rather than a turning point—for now.

The dominant engine OEMs—GE Aerospace, Safran, Pratt & Whitney, Rolls-Royce and MTU—secured 47% of the commercial aerospace profit pool last year with a record 19.5% margin, well above pre-pandemic levels. Global revenue passenger kilometers rose 5.3% in 2025, lifting profits as shop visits soared.

While engine OEM margins look outsize, they should not be viewed in isolation from the risks these players took in developing their current powerplants. GE Aerospace invested more than $10 billion in the GEnx and GE9X, CFM International Leap development exceeded $5 billion, and the Rolls-Royce Trent XWB cost an estimated £4 billion ($5.4 billion).

The bets made when outcomes were anything but certain are now paying off at scale. The current margin expansion is not just aftermarket leverage; it is the compounding return on years of patient capital deployment.

The aircraft leasing sector remains the second-largest earner, capturing 38% of the industry profit pool, with margins above 25%. Lessors have sustained those through the post-COVID-19 rebound thanks to persistent delivery backlogs, strong airline demand and constrained fleet supply.

Yet some pressure is starting to emerge. Lease rates are finding a ceiling, and once OEM delivery rates normalize over the next 2-3 years, the supply scarcity underpinning today’s economics will moderate. Sustained high fuel prices could push more carriers into financial trouble, and stressed airline credit is the channel through which lease economics can crack.

Aircraft OEMs remain stubbornly close to breakeven with earnings before interest and tax of just 1.5%. Boeing’s ongoing recovery was offset by Airbus’ margin pressure from ongoing ramp-up costs. Aerostructures as a whole were structurally loss-making for the fifth consecutive year, nursing a negative margin of 24%.

Maintenance, repair and overhaul (MRO) is approaching historical margins of around 7%, equipment OEMs hold double-digit margins around 17%, and cabin suppliers are finally consolidating their recovery but remain stuck in low-single-digit margin territory. None can rival the returns of the engine and lessor franchises.

The Middle East conflict has dented global airline traffic growth and spiked jet fuel prices, but the structural protections around the aftermarket are intact. Engine shop visit turnaround times remain extended, and slots are scarce. The in-service fleet is older than it should be because Boeing and Airbus production has yet to recover to 2018 levels.

GE Aerospace flagged on July 16 that growth in flight departures is expected to return in the second half of the year after being broadly flat during the first six months. AAR in May bumped up its fiscal 2026 organic sales growth forecast by 100 basis points to around 12%.

A key watch item is whether sustained demand softness will drive up retirements—the only scenario that genuinely weakens the engine and heavy MRO moat. Historical precedent allows for a one-year lag, which pushes that pressure window into 2027.

Lower supply chain tiers are also a factor. Profitability among thousands of smaller players is mixed, although their liquidity to invest to ramp up is a larger issue, since OEMs are paying them more promptly after having pushed payment terms over 120 days.

The structural read is this: The divide is not closing. Investors have voted—commercial aerospace outperformed the S&P 500 by 11% in the past five years, but the return was driven by suppliers and lessors, not OEMs at the top of the pyramid. The engine-makers earned their dominance through capital risk and the long game.

The test of 2026 will be whether that dominance holds through a first real macro shock. Our reading of the operating data suggests most of it will.

Aerospace specialist Matteo Peraldo is a partner and managing director at AlixPartners. He is based in Miami.