Leeham News and Analysis
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Part 2: Solving Workforce shortages: Bumping Along or Soaring?
By Kathryn B. Creedy
Analysis
May 6, 2026, © Leeham News: The history of workforce issues is long–40 years–and dozens of efforts have attempted to address workforce shortages as we’ve bumped along, complaining about the problem and waiting for someone else to solve it.
Those involved in previous efforts warn that they failed because there was no accountability, and no one took responsibility for making things happen. They also cited the efforts staffed by volunteers. Now, our shortages are more acute than ever and threaten not only our economy but also our ability to grow.
Government studies often get shelved, gathering dust instead of solving the problem that study addressed. Credit: Bold Planning.
Over the past 40 years, Washington aviation/aerospace policy groups have focused on government solutions. After all, that is what they do, but it is time for a rethink. That is not to belittle the impressive accomplishments achieved when industry comes together, including workforce education grants and the robust education programs in FAA AvSED and NASA.
But if we do not act on our own, we will probably be having the same conversation decades from now. Instead, we could be leveraging the hundreds of great education programs already in place to solve our workforce issues once and for all.
Case in point of how we fail. It has been four years since the Congressionally mandated Youth Access to American Jobs in Aviation (YIATF) Report was issued, and nothing has been done, although private interests have been trying. It now sits gathering dust on some shelf. Ironically, we’ve seen this before, since the 2022 report was largely a repeat of the 20+-year-old Brewer Report. Nothing came of either effort.
Part 1: Workforce Shortage Stunting Industry Growth, Costing Billions
Summary:
- This two-part series outlines the threat posed by workforce shortages to the future growth of aviation and aerospace, since industry-wide costs of workforce shortages are unquantified. Estimates suggest the industry is leaving tens of billions on the table as a result
- Technology alone cannot solve the problem as the workforce changes
- Current industry efforts to address the workforce are fragmented and, to elevate aviation/aerospace pathways and careers, must be coordinated with organizations delivering educational and career programs
- The solution is a collaborative, professionally managed Early-Learning-to-Career Pipeline leveraging existing programs and alliances to guide youth to aviation/aerospace careers
- Industry must pivot from relying on government to investing in organizing the army and educational and career assets we already have.
- Success requires industry-wide proactive collaboration, cultural change, and investment.
By Kathryn Creedy
May 5, 2026, © Leeham News: Not one of the numerous studies from every aviation/aerospace policy organization has quantified the costs of not addressing our workforce shortages at an industry-wide level, although concerns are rising at the academic level. And there is little effort in developing a unified career pipeline guiding the kids we are already inspiring into our careers, as other industries have long been doing.
Only a few estimates exist on the cost of workforce shortages:
- Aeronautical Repair Station Association (ARSA): Perhaps ~$14bn for the maintenance industry.
- Boston Consulting Group (BCG): Unavailable aircraft and MRO inefficiencies cost the industry $27bn annually.
- McKinsey & Co: Cost of Attrition for one medium-sized company is ~$300m–$330m
- International Air Transport Assn. (IATA)The additional cost borne by the airline industry from the supply chain was over $11bn in fuel and maintenance.
Aviation and aerospace policy groups in Washington, in their rush to convince policy leaders about the importance of their multi-billion-dollar impact on the economy, might be missing the forest for the trees in not quantifying the costs.
Raisbeck Aviation High School in Seattle is privately funded. Students study to become aerospace engineers. Credit: Raisbeck Aviation High School.
It is clear that the aviation, aerospace, and defense industries contribute billions to the economy, but two important facts are missing.
The total talent forecast for all segments of the industry and the cost of failing to meet workforce needs.
All studies cite rising compensation, higher maintenance, repair and overhaul (MRO) and manufacturing costs, and the costs associated with delays in returning aircraft from maintenance and in delivering new aircraft off the production line. But none quantifies how much those rising costs are.
Nor are they calculating the cost to safety, despite rising concerns over the loss of seasoned aviators and aviation maintenance technicians, and the resulting “juniority” on the flight deck and in the maintenance bay. Exacerbating our shortages is the training pipeline with a shortage of instructors, professors, and teachers.
RTX Q1 2026 Earnings: Conflict Drives Defense Focus as RTX Delivers Strong Start, Pratt Responds to Airbus in A320 Glider Spat
By Chris Sloan
April 21, 2026 © Leeham News: RTX opened its 2026 financial reporting with a robust first quarter, but the earnings call was dominated by the implications of the conflict in the Middle East following the launch of Operation Epic Fury on Feb. 28. The late-quarter timing limited any material impact on first-quarter results, but the discussion quickly shifted to how the evolving situation could influence both commercial demand and defense spending.
Analysts pointed to RTX’s diversified structure as a key advantage in this environment. Vertical Research Partners said, “while investors may not be huge fans of diversification, RTX’s 1Q results have shown that sometimes it can work out,” citing “aftermarket growth at Pratt, OEM growth at Collins, and munitions growth at Raytheon” as drivers of strong performance, with the latter “driving the upside to the 2026 guidance.”
As a prime contractor across propulsion, avionics and defense systems, RTX sits at the center of the defense response. Demand for defense products and services remained robust, with increased focus on munitions production, replenishment cycles and sustained operational tempo across U.S. and allied forces.
President and Chief Executive Officer Christopher Calio said adjusted sales were $22.1bn, up 10% organically, with growth across all three segments. Adjusted EPS of $1.78 increased 21% year-over-year, driven by 14% growth in segment operating profit, while free cash flow reached $1.3bn, up $500mn from a year ago.
Orders reflected this strength. Calio shared the book-to-bill was 1.14, with backlog reaching a record $271bn, up 25% year-over-year, supported by both commercial and defense awards. The defense side, particularly munitions and systems, was a key contributor to growth and visibility.
RTX Q1 2026 Earnings Slide
RTX 2025 Earnings: Commercial Aerospace Leads Growth as Pratt Advances GTF Recovery
By Chris Sloan
Jan. 27, 2026 © Leeham News: “RTX is constructed to meet the moment—by the moment I mean the ramp both in defense and commercial—and to drive long-term value for customers and shareholders,” RTX President and Chief Executive Officer Christopher Calio said as the company closed 2025.
The company has strong order momentum and a record backlog, driven by commercial aerospace demand and continued progress at Pratt & Whitney as the company works through the Geared Turbofan (GTF) powder metal issue.
RTX ended the year with a full-year book-to-bill of 1.56 and a $268bn backlog, up 23% year over year, including $161bn of commercial orders and $107bn of defense awards. Commercial backlog rose 29%, supported by higher aircraft production rates and resilient passenger air travel, while organic growth was led by commercial OE and aftermarket.
At Pratt, management emphasized improving performance as the GTF program continues to grow and newer contracts begin to reshape the business. Chief Financial Officer Neil G. Mitchill Jr. said Pratt is “growing out of the older contracts,” with improved pricing on new work and legacy businesses remaining intact, positioning the segment for margin expansion over the next several years as backlog is executed.
Looking ahead, RTX outlined several areas that will shape results in 2026 and beyond, including continued improvements in GTF fleet management, rising MRO output, and the transition to the GTF Advantage engine. Management also pointed to alignment with OEM production ramp-ups, continued improvement at Collins Aerospace, and increased focus on defense output and capital deployment following recent comments from the Trump Administration, framing the company’s outlook as it balances near-term execution with longer-term growth across commercial and defense markets.
RTX Q4 and FY 2025 Earnings Call Slide Image: RTX
Pratt & Whitney builds for the future while wrestling with the present
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By Bjorn Fehrm and Charlotte Bailey
January 26, 2026, © Leeham News: Pratt & Whitney (PW) bet big on the geared turbofan to take it back to a sizeable position in the market’s largest airliner segment, the Single-Aisle. It spent more than 20 years to develop the fan gearbox, including functional demonstrator engines that flew on Airbus test aircraft to prove the technology.
The effort was a success; the gearbox in the Pratt & Whitney range of Geared TurboFans, GTFs, has worked perfectly. It achieved what was promised, a low fuel consumption, and has been rock-solid in its function.
Yet PW’s GTFs have had a range of problems since their introduction in 2016. Bent main shafts, combustors that burn through, bearings that fail. And on top, a huge call-back of engines, as a contaminated power metal process has produced compressor and turbine discs that risk failing before their on-engine life expires. The situation has caused over 600 Airbus A320 and A321neos with GTF engines to be grounded for engine replacements, if and when replacement discs are available.
The issues, stemming from the “business as usual” parts of the GTF, have led to write-offs of billions of dollars for PW’s mother RTX and to lost market share to the competing CFM LEAP engine on the Airbus A320/321neo series. But while this clouds the business of yesterday and today, Pratt & Whitney still has the clout to invest in the future. Being part of one of the World’s largest Defence and Aerospace Companies is an important part of the answer.
Figure 1. The Maeve MJ500 with the revolutionary Pratt & Whitney Canada Constant Volume Open Fan engine. Source: Maeve. Read more
RTX Posts Steady Q3 2-25 As GTF Stabilization, Collins Strength, And Tariff Headwinds Define Results
By Chris Sloan
October 21, 2025, © Leeham News: RTX delivered a solid and steady third quarter, marked by broad-based growth, improving GTF maintenance output, and continued strength at Collins Aerospace—even as tariff headwinds persisted. Company sales rose 12% year-over-year to $22.5bn, or 13% organically, while adjusted segment operating profit increased 19%, marking the sixth consecutive quarter of year-over-year margin expansion. Net income attributable to common shareholders climbed to $1.9bn, up from $1.4bn a year ago.
Chairman and CEO Christopher Calio credited strong execution across all three segments for the performance, citing double-digit growth in commercial OE, aftermarket, and defense. RTX booked $37bn in new awards during the quarter—$23bn in defense and $14bn in commercial—lifting total backlog to $251bn, up 18% since the end of 2024.
With passenger traffic holding firm and OEM production trending higher, Collins and Pratt both benefited from robust aerospace demand. Calio said the company is raising its full-year outlook for adjusted sales and operating profit, supported by the ongoing production ramp and a stabilizing supply chain.
The conversation around the GTF program has shifted: improved MRO throughput and material flow replaced the usual focus on compensation and grounded aircraft, and for the first time in recent memory, the familiar “powdered-metal” refrain was absent from the call—an indication that Pratt’s recovery is turning a corner.
Collins Aerospace continues R&D on electrical options despite industry pullback
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By Scott Hamilton
Aug. 11, 2025, © Leeham News: At the Annual General Meeting of the International Air Transport Association (IATA) in October 2021, a detailed green aviation plan was adopted to achieve net-zero carbon emissions by 2050.
The ambitious program included milestones in the use of Sustainable Aviation Fuel (SAF) and other alternative fuels. The policy was part of a greater industry effort to develop battery, hydrogen, and hybrid-powered aircraft and eVTOLs.
Some 300 companies were founded to pursue these various objectives, and many global airlines adopted environmental goals. Some placed conditional orders for eVTOLS or hybrid aircraft.
Boeing focused on SAF development while Airbus pursued hydrogen-powered concepts. GE, Safran, Pratt & Whitney, Pratt & Whitney Canada (PWC), and Rolls-Royce each have or continue to research hybrid or new engine opportunities.
Todd Spierling of Collins Aerospace. Credit: Collins Aerospace.
Plenty of skepticism about reaching the Net Zero goal emerged even at the 2021 IATA AGM. Tim Clark, president of Emirates Airline, famously cautioned, Don’t make promises you can’t keep.
Since then, Airbus abandoned its hydrogen goal. Several airlines abandoned their net-zero goals. Most of the 300 start-up companies failed, notably Lilium, which went through an astonishing $1bn before collapsing into insolvency.
One company that acknowledged the idea that aircraft can be powered by batteries alone is Collins Aerospace, a unit of RTX Corp. In an interview with LNA before the Paris Air Show, Todd Spierling, a principal technical fellow, was clear.
“We’ve been working a lot with Pratt and Whitney on electrification and what it means,” Spierling said. “One of the things we found was if you just trade out fuel for batteries, it doesn’t work out.”
What’s the next new aircraft, Part 5
By Scott Hamilton and Bjorn Fehrm
July 31, 2025, © Leeham News: We wrap up our five-part series today on What’s the Next New Airplane in the coming decades. We now look at Airplanes 9-13 in Figure 1 below.
Figure 1. The 13 airliners we look at in the series. Source: Leeham Co.
These are the (9) COMAC 929, (10) Eco-version of New Light Twin, (11) CFM Open Fan single aisle, (12) the Boeing 787 re-engine, and (13) the Airbus A350 re-engine.
RTX Q2 2025 Earnings: Tariff Relief, GTF Stabilization, Strong Demand, and FAA Tailwinds Lift Outlook
By Chris Sloan
July 22, 2025, © Leeham News: RTX delivered strong second-quarter results, supported by continued momentum in the commercial aerospace sector, stabilization in its geared turbofan program, and a significant aftermarket ramp across Pratt & Whitney and Collins Aerospace.
Executives highlighted improving supply chain conditions and growing demand as key contributors, while also noting upcoming FAA modernization investments as a long-term opportunity. Despite ongoing trade friction and a sizeable tariff burden, RTX raised its full-year sales outlook and reaffirmed its free cash flow guidance. Executives said recent developments on the tariff front—including favorable exemptions and successful mitigation strategies—helped soften the impact and improve visibility heading into the second half.
“Our outlook on the impact of tariffs has improved for the year,” said RTX President and Chief Executive Christopher Calio. The company originally expected a $850m tariff headwind in 2025 but has since lowered that figure to $500m. Calio attributed half of the reduction to external developments such as the paused implementation of new rates and the UK’s decision to exempt aerospace components. The remainder, he said, came from the company’s mitigation actions, including optimizing material flows through its supply chain, taking pricing actions where possible, and leveraging trade agreements such as USMCA.
RTX has already incurred approximately $125m in tariff costs through the first half of the year, with the remaining $375m expected in the second half. Of that, $275m is expected to impact Collins Aerospace, and $225m will affect Pratt & Whitney. CFO Neil Mitchill Jr. said roughly $60m and $40m in costs have already been recorded at Collins and Pratt, respectively, during Q2. The total cash impact is expected to reach $600m for the year.
Services are driving revenues and profits in difficult times, Part II
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By Karl Sinclair
May 22, 2025, © Leeham News: In our first look at OEMs in the aviation industry with a significant revenue stream derived from services, LNA analyzed airframe-makers.
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Now the focus shifts to engine and simulator manufacturers, and how after-market sales can pull a company through difficult times. It can even be the model, that a business follows.