GE Aerospace's business model represents a fundamental departure from the diversified conglomerate structure that defined General Electric for most of its history. Where the old GE earned money from a bewildering array of sources — consumer appliance financing, insurance underwriting, reality television, wind turbines, and oil field services — the new GE Aerospace operates a focused, two-segment model built around designing, manufacturing, and servicing some of the world's most complex mechanical systems: commercial and military jet engines. The company's revenue is organized into two reportable segments: Commercial Engines & Services and Defense & Propulsion Technologies. Together these generated $38.7 billion in FY2024 revenues, with operating profit of approximately $6.8 billion and adjusted free cash flow of roughly $6.1 billion — metrics that reflect both the premium pricing power of high-performance turbomachinery and the capital discipline that Culp imposed on the organization beginning in 2018. **Commercial Engines & Services: The Crown Jewel** The commercial segment is the larger of the two and generates revenue through two distinct but deeply interrelated mechanisms: original equipment (OE) engine sales and aftermarket services. The OE side supplies new engines directly to aircraft manufacturers — most notably Boeing and Airbus — for installation on new-build aircraft. GE's marquee commercial offerings include the GE9X, which powers the Boeing 777X and represents the world's largest commercial jet engine by diameter at 134 inches; the GE90, which exclusively powers the Boeing 777 fleet and has been certified as the world's most powerful commercial engine; and the CFM LEAP family, co-developed with Safran under the 50/50 joint venture CFM International, which powers the Boeing 737 MAX and the Airbus A320neo family. The LEAP engine is central to GE Aerospace's commercial strategy. As of 2024, LEAP has accumulated orders and commitments for more than 22,000 engines, making it one of the bestselling commercial jet engines in aviation history. With Boeing targeting a gradual ramp to 38 737 MAX aircraft per month by late 2025 and Airbus planning to reach 75 A320neo-family aircraft per month by 2026, LEAP production volume is expected to scale significantly through the decade. Each LEAP-1B engine (for the MAX) has a list price of approximately $14 million, though airlines typically negotiate discounts — meaning GE recognizes revenue at discounted levels on the OE sale, accepting short-term margin compression in exchange for long-term aftermarket capture. This is where GE Aerospace's business model achieves its most durable economics: the aftermarket services business. Once an airline takes delivery of an aircraft powered by a GE or CFM engine, that engine will require periodic overhauls roughly every 4,000 to 8,000 flight hours depending on operational intensity. These shop visits — where engines are disassembled, inspected, repaired, and rebuilt — are extraordinarily complex and capital-intensive operations that only OEM-qualified facilities and a handful of MRO specialists can perform with full authority. GE captures a large share of this activity through its network of 45 MRO facilities worldwide and through long-term service agreements (LTSAs) that commit airlines to use GE or approved facilities for their scheduled maintenance. The services business generates far superior margins to OE manufacturing — a well-understood dynamic in capital goods industries sometimes called the "razor and blades" model. In GE Aerospace's case, however, the analogy understates the complexity: jet engine overhauls can cost between $3 million and $30 million per event depending on the engine type, and with over 44,000 commercial engines in operation globally under some form of GE service relationship, the company commands a recurring revenue stream that is structurally resistant to near-term disruption. The commercial services backlog stood at approximately $145 billion as of year-end 2024, providing extraordinary revenue visibility over a 10-to-15-year horizon. **Defense & Propulsion Technologies: Strategic Diversification** GE Aerospace's defense segment provides propulsion systems for a wide range of U.S. Military and allied-nation platforms. Key programs include the F110 engine, which powers the F-16 Fighting Falcon and F-15 Eagle fighters operated by dozens of air forces worldwide; the T700/CT7 turboshaft family, the backbone of the U.S. Army's helicopter fleet including the Black Hawk and Apache; the F414 engine, which powers the F/A-18E/F Super Hornet; and engines supporting the Sikorsky CH-53K King Stallion heavy-lift helicopter. The division also holds a significant stake in the development of next-generation adaptive cycle engines for the U.S. Air Force's Next Generation Air Dominance (NGAD) program. Defense revenues are typically more stable than commercial revenues across economic cycles but grow more slowly and are subject to congressional appropriation risk. For FY2024, the defense segment generated approximately $9 billion of GE Aerospace's total revenue, providing a meaningful counterbalance during commercial aviation downturns such as the COVID-19 pandemic period, when airline traffic collapsed and new engine deliveries stalled. **The CFM International Joint Venture** A critical structural element of GE Aerospace's business model is the CFM International joint venture, which GE operates on a 50/50 basis with France's Safran Aircraft Engines. Formed in 1974, CFM International has delivered more than 40,000 engines over its history, with the CFM56 family and its successor LEAP platform representing the dominant engines for single-aisle commercial aviation — the highest-volume segment of the global fleet. The JV's combined market share in the narrowbody engine market is estimated at approximately 55 to 60 percent, giving CFM International a structural duopoly position alongside Pratt & Whitney (a subsidiary of RTX Corporation). Revenue and profits from CFM are not fully consolidated into GE Aerospace's financials; rather, the company recognizes its proportionate share, which means GE Aerospace's reported figures somewhat understate the company's economic exposure to the single-aisle market. **Pricing Power and Long-Term Contracts** GE Aerospace's pricing power derives from several reinforcing factors: the technological barriers to developing certified jet engines (a process that typically requires 10 or more years and several billion dollars in development investment), the switching costs embedded in airline fleet decisions (carriers that standardize on a single engine type save substantially on pilot training, maintenance tooling, and parts inventory), and the regulatory requirements that mandate OEM or OEM-approved facilities for certain maintenance tasks. These structural moats allow GE Aerospace to generate operating margins in the low-to-mid teens on an adjusted basis, with management targeting 20-percent-plus adjusted operating margins on its commercial services business as the installed base matures and mix shifts toward higher-margin engine families. **Capital Allocation Philosophy Under Culp** Since Culp took over in 2018, GE's capital allocation philosophy has shifted dramatically. The old GE was notorious for using earnings to fund dividends, acquisitions, and share buybacks while accumulating pension deficits and off-balance-sheet liabilities in GE Capital. The new GE Aerospace prioritizes organic investment in engine development and manufacturing capacity, pension liability reduction (the company made approximately $5 billion in pension contributions between 2019 and 2023), and disciplined return of capital through buybacks. The company repurchased approximately $3.5 billion in shares during FY2024 and has authorized additional repurchases, reflecting management's confidence in cash generation durability.