GE Aerospace CEO Larry Culp addressed recent airline industry grievances on Thursday concerning the soaring costs of engine maintenance and the scarcity of available engines, which airlines argue heavily strain their operations. Airlines have contended that disruptions in supply chains, prolonged repair wait times, and shortages of spare engines have shifted pricing advantage toward the engine manufacturers.
These concerns have been prominently voiced by the International Air Transport Association (IATA) Director General Willie Walsh during a period when the aerospace supply chain endures significant stress. According to Bain & Company, turnaround times at repair facilities for newer-generation engines have increased by approximately 150% compared to pre-pandemic levels. This surge in repair duration coincides with airlines operating older aircraft for extended periods while awaiting delayed deliveries of new planes.
In an exclusive discussion with Reuters, Culp defended the pricing approaches of the jet-engine industry, stating that the costs reflect the substantial investments necessary to develop and maintain intricate propulsion systems, alongside the enduring value these manufacturers provide over engine life cycles spanning decades. He emphasized, "We invest heavily in technology," referencing GE's estimated $3 billion annual research and development budget.
Culp also asserted that GE Aerospace strives to maintain transparency with its clients regarding "our place in the value chain: the investments we make, the risks we take on, and the value that we create."
In response to airline frustrations, GE Aerospace is accelerating enhancements to the durability of its LEAP engine series, developed through CFM International, the joint venture between GE and France's Safran, which exclusively supplies engines for Boeing's 737 MAX.
Recently, regulators in the United States and Europe approved a durability improvement kit for the LEAP-1A engine, serving Airbus A320neo family aircraft, intended to extend operational time in demanding high-temperature and harsh environments. Additionally, CFM International has announced ongoing efforts to devise similar durability upgrades for the LEAP-1B engine utilized on Boeing 737 MAX jets.
Culp noted that these LEAP durability enhancements are "all geared toward improving our product performance and lowering the airlines’ cost of ownership," signaling a commitment to operational efficiency for airline customers.
GE Aerospace's aftermarket business, from which it derives over 70% of its commercial engine revenue through parts and related services, continues to benefit from sustained demand. Culp remarked that both aftermarket and new-engine production remain robust, with no reports of customer slowdown.
The company issued projections on Thursday that its 2026 profits would exceed analysts' expectations, attributing optimism to strong demand for high-margin aftermarket work as airlines navigate fleet maintenance priorities amidst aircraft delivery constraints. GE Aerospace shares have appreciated roughly 70% over the last twelve months, significantly outperforming the S&P 500.
Another industry tension point involves whether engine manufacturers can simultaneously support increasing maintenance needs while fulfilling new engine production commitments, a debate intensified by recent public disputes between Airbus and RTX's Pratt & Whitney over engine delivery schedules.
Culp dismissed the notion that supporting airlines' existing fleets through aftermarket services and producing new engines are mutually exclusive endeavors. He observed that airlines are balancing the priorities of maintaining current aircraft while modernizing their fleets concurrently. "At the end of the day, the airlines are the ultimate customer," he stated. "We’re going to have to do more every year for the rest of this decade — serving airlines directly and working hand in hand with our airframe partners."
On the topic of pricing and inflation, airline officials have raised concerns that new U.S. trade tariffs and expansive inflationary pressures have been leveraged to justify price increases. Culp confirmed that GE Aerospace continues to address cost pressures affecting certain supply inputs and plans to review aftermarket pricing during its standard annual summer process. However, the company also relies on productivity improvements, product redesigns, and strategic resourcing to restrain passing costs onto customers.
Regarding evolving trade regulations, Culp acknowledged ongoing industry adjustments, emphasizing that tariffs constitute just one portion of a broader inflationary environment. He remarked, "Everyone has been working through ... how to navigate the new trade environment. Tariffs and commodity inflation are just part of the equation with respect to thinking about price."