Aerospace & Defence Update: Shop visit stress test – scope the primary risk

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Aerospace & Defence Update: Shop visit stress test – scope the primary risk

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Aerospace & Defence Update

Shop visit stress test – scope the primary

risk

Price Objective Change

Shop visit stress test – scope is the primary risk 22 May 2026

We stress-test the legacy narrowbody engine aftermarket (CFM56/V2500) into 2027–28 Equity

against a more volatile operating backdrop. With fuel pricing acting as a near-term Europe

operational constraint, airline capacity decisions are becoming more tactical, prioritising Aerospace & Defence

fuel-efficient lift and optimising networks around cash profitability. In our data, we are Benjamin Heelan >>

seeing this feed through to engine cycle intensity. Given the fuel impact to airline Research Analyst

profitability and elevated ‘scope’, we expect this to feed into aftermarket demand. Merrill+44 20Lynch7996 (DIFC)5723

benjamin.heelan@bofa.com

Legacy narrowbodies are down HSD to high teens YoY Lorenzo Di Patrizi >>

Our FlightRadar-based cycle data flags that the legacy narrowbody families are currently Research Analyst

MLI (UK)

among the weakest utilisation performers, with the V2500 showing the more notable +44 20 7995 7626

deceleration, currently down c.19% YoY. The CFM family is currently down c.10% YoY, lorenzo.dipatrizi@bofa.com

with the -7B outperforming the -5B. Both have seen a sharp deterioration, highlighting Ronald J. Epstein Research Analyst

that airlines are prioritising next gen > old gen engines for efficiency savings. BofAS

r.epstein@bofa.com

V2500 shop visits down vs. pre-COVID, CFM slightly up

We think that shop visit volumes across the ecosystem tell a nuanced story: V2500 shop

Exhibit 1: PO Changesvisits are below pre-COVID levels, while CFM56 visits appear slightly ahead. However,