Moody's Ratings has raised GE Aerospace's senior unsecured rating one notch to A2 from A3 and improved its commercial paper rating to P1 from P2, while assigning a positive outlook. The ratings agency framed the action around the company's market position, cash generation prospects and anticipated balance sheet strength.
Rationale for the upgrade
Moody's noted GE Aerospace's considerable scale as a manufacturer of engines and systems for both commercial and military platforms. The ratings firm highlighted an installed engine base of nearly 80,000 units across aerospace and defense programs as a core driver of future earnings and free cash flow. According to Moody's, this installed base will underpin strong earnings growth and sustained cash generation over coming years.
The upgrade also reflects Moody's expectation that GE Aerospace will adopt a measured approach to capital allocation and preserve a strong balance sheet, with debt-to-EBITDA maintained below 2.5 times. Moody's projects free cash flow-to-debt will exceed 20 percent over the next few years, a level the agency said would provide significant financial flexibility.
Business profile and competitive advantages
Moody's emphasized GE Aerospace's leading industry position, attributing its competitive advantages to technological leadership, elevated research and development spending, high barriers to entry and participation on major aerospace programs. The company's engine portfolio is described as balanced across new, developing and established platforms, spanning different airframers, airline customers and aircraft types.
The installed base of about 80,000 engines is split roughly 50,000 commercial and 30,000 military units. Moody's noted a relatively young fleet age, which the agency said should support decades of maintenance and aftermarket services revenue.
Recent performance and near-term expectations
Favorable conditions in both commercial and military markets contributed to reported results in 2025: sales were up 18 percent and orders rose 32 percent during the year. Moody's expects high single-digit sales growth in 2026 as higher original equipment production and continued demand for maintenance, repair and operations services support revenue.
For the twelve months ended December 31, 2025, GE Aerospace reported revenue of $45.9 billion. Commercial Engines & Services represented 73 percent of sales, while Defense & Propulsion Technologies accounted for 23 percent.
Capital allocation and liquidity considerations
Moody's acknowledged planned share repurchases totaling more than $14 billion across 2025 and 2026, but nonetheless expects GE Aerospace to maintain a balanced capital allocation policy and keep leverage below the 2.5 times debt-to-EBITDA threshold by the end of 2026. The ratings agency sees the company's projected free cash flow-to-debt ratio - above 20 percent - as a key element supporting that assessment.
Supply chain and operational challenges
Moody's noted that supply chain issues remain a constraint, with intermittent bottlenecks, material shortages and labor constraints continuing to affect operations. Still, the company experienced improved performance in 2025, including higher deliveries of LEAP engines - roughly 1,800 units, an increase of 28 percent - and better material availability.
GE Aerospace plans targeted investments to address capacity and supply chain needs, including approximately $1 billion allocated to maintenance, repair and overhaul capacity and an additional $1 billion earmarked for supply chain investments over the next few years.
Outlook
The positive outlook reflects Moody's expectation that ongoing airline demand in MRO markets will help sustain strong operating performance, support earnings growth and generate the cash flows needed to preserve robust credit metrics.
Moody's action centers on a combination of scale, aftermarket durability and projected cash generation, balanced against the operational headwinds that the company continues to manage.