Anyone betting that the aero engine party is nearly over might want to think again.
According to JP Morgan, the “golden age” for the sector still has plenty of fuel in the tank, with strong market conditions likely to last well into the first half of 2027.
That was the takeaway from a recent call hosted by the bank with Paolo Lironi, chief executive of aviation consultancy SGI Aviation and a long-time industry insider.
Lironi described today’s environment as exceptionally favourable for engine makers, citing robust demand for new aircraft, extended maintenance cycles and constrained supply chains that are keeping prices firm.
JP Morgan agrees, arguing that it is “at least one year too early” for investors to start rotating out of the sector.
The bank has overweight ratings across all seven of the engine groups it covers on both sides of the Atlantic, including Rolls-Royce Holdings PLC (LSE:RR.), GE Aerospace, RTX, Safran, MTU Aero Engines, StandardAero and Melrose Industries PLC (LSE:MRO, OTC:MLSPF).
It expects many of these names to keep delivering “beat and raise” quarters through 2026 and possibly into early 2027 — in other words, earnings that surprise to the upside followed by upgraded forecasts.
For UK investors, Rolls-Royce remains the key story. The company has already benefited from the rebound in long-haul flying and a tighter grip on costs.
With engine flying hours still rising and civil aftermarket demand running strong, JP Morgan sees the favourable cycle continuing.
The message is clear: the skies are still friendly for the aero engine makers, and Rolls-Royce is well placed to keep cruising.