CFM International, the joint venture between GE Aerospace and Safran, delivered 41% more LEAP engines in the first half of 2026 than in the same period last year. The increase matters because Boeing and Airbus both depend on LEAP output to work through years-long order backlogs, even as the ramp-up pressures GE Aerospace's near-term margins.
Backlogs run for years without more engines
Boeing carries a firm backlog of 4,381 orders for the 737 MAX, and at its current production rate of 47 aircraft a month, that equals 7.8 years of work. Airbus, meanwhile, holds an order backlog of about 7,500 A320s, which at its target of at least 70 a month by the end of 2027 amounts to almost nine years of production.
The LEAP engine is the sole option on the 737 MAX and one of two choices, alongside Pratt & Whitney's geared turbofan, on the A320neo family. As a result, neither planemaker can raise output or clear its backlog unless CFM keeps delivering more engines, since backlogs grow whenever new orders outpace the pace of deliveries.
Cash and margins ride on engine supply
Aircraft that sit nearly finished but waiting for engines tie up cash for Boeing and Airbus until the engines arrive and the planes can be delivered and paid for. Faster deliveries therefore free up working capital as much as they add revenue.
Profit margins move the same way. Manufacturers grow profit margin mainly by lowering unit production costs as output rises, so a slower LEAP ramp would keep costs elevated on both assembly lines.
Airlines factor engine deliveries into fleet planning too, and delays would hit carriers that are counting on newer, more fuel-efficient jets such as the A321neo. Limited spare-engine supply from CFM and Pratt & Whitney could also leave older aircraft grounded or force airlines to pay high prices to rent replacement engines.
GE Aerospace faces a near-term trade-off
For GE Aerospace, engine makers typically sell new engines at a loss and make their money later through long-term service agreements and spare-engine sales, since aftermarket revenue from servicing engines can run for over 40 years. As CFM ships more new engines relative to spares and aftermarket work, GE Aerospace will feel some margin pressure in the near term.
That pressure, however, will also lead to greater long-term profitability. The ramp-up also stands to benefit companies across the aerospace supply chain that depend on new aircraft construction for their own sales.
Source: The Motley Fool
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