Research Note
The Installed Base
Why the aerospace cycle pays in the aftermarket rather than at the delivery gate.
Commercial aerospace is judged on deliveries. It is the number the manufacturers report monthly, the number the trade press counts, and the number an investor is most often shown. It is also the number the industry has the least control over, and reading the sector through it produces a consistent error: it treats a production problem as though it were a demand problem.
Demand is not in question. The order books say so, and they have said so for several years. What has been in question since 2019 is how quickly aircraft can be built, and that has turned out to be a much slower thing to fix than either manufacturer expected. The interesting consequence is not what it does to the delivery line. It is what it does to the fleet already flying.
Production Is the Constraint, Not Demand
At the end of 2025 the two manufacturers held a combined order backlog of roughly fifteen thousand aircraft. Against the delivery rates each is projecting, that is about eleven years of production for either of them. A backlog of that length stops being a measure of demand and becomes a statement about capacity: at eleven years out, an order placed today is not a forecast of what an airline wants, it is a queue position.
Order Backlog Is Eleven Years of Production
Year-end 2025 commercial aircraft backlog, and the backlog expressed as years of output at each manufacturer's projected delivery rate
Airbus figure excludes the A320ceo; Boeing figure excludes legacy 777-300ER positions.
Source: CAPA Centre for Aviation.
The two figures are close to but not exactly comparable, and the exhibit says so rather than quietly presenting them as like for like. What matters is not the gap between them but that both are of the same order. Neither manufacturer is short of orders. Both are short of the ability to convert them.
The Fleet Does Not Wait for the Production Rate
Deliveries have not recovered to where they were before the 737 MAX grounding and the pandemic. Airbus delivered 793 aircraft in 2025, which is below its own 2019 figure of 863 and only marginally ahead of 2018. Seven years on, the larger of the two manufacturers is producing at roughly the rate it managed before the disruption began.
Deliveries Have Not Returned to the 2018 Peak
Annual Airbus commercial aircraft deliveries, 2018 to 2025, against the manufacturer's 2018 pre-grounding level
Source: Airbus, as reported by CAPA Centre for Aviation and Forecast International.
Boeing is absent from that exhibit, and the reason is worth stating plainly: a continuous Boeing series across the same period could not be sourced to a primary document, and a chart with a hole plotted through it is worse than a narrower chart. Boeing delivered 600 aircraft in 2025 against 348 in 2024, so the direction is not in doubt; the shape of the intervening years is not something this note will assert without the filings behind it.
The consequence of a shortfall in new aircraft is not that flights do not happen. It is that they happen on older aircraft. An airframe that would have been retired stays in service, and an engine that would have come off wing keeps running, and both continue to consume parts and shop visits on a schedule set by hours flown rather than by anything a manufacturer decides. A production constraint at the front of the industry becomes volume at the back of it.
Where the Growth Has Actually Been
If that reading is right, it should show up in the revenue of the companies that sell into the installed base rather than into the production line. It does.
Aerospace Suppliers Have Outgrown the Delivery Recovery
Annual revenue rebased to 2018 = 100, four listed aerospace suppliers, fiscal years 2018 to 2025
Revenue as reported on Form 10-K, rebased by Seven Measures to 2018 = 100.
Source: Company Forms 10-K via SEC EDGAR; Seven Measures calculations.
All four suppliers have grown revenue well ahead of the delivery recovery over the same period, and two of them have roughly two and a half times their 2018 revenue while Airbus deliveries are approximately flat against 2018. That gap is the thesis in one picture: the money in this cycle has not been made at the delivery gate.
Investment Implications
The firm reads three things from this. First, that delivery forecasts are the wrong variable to underwrite in this sector, because they have been revised down repeatedly for seven years and the revisions have not changed the underlying demand. Second, that an eleven-year backlog transfers pricing power to whoever is genuinely capacity-constrained, which is not the same set of companies as those with the largest order books. Third, that the installed base is the more predictable of the two revenue pools, because it is driven by hours flown on aircraft that already exist rather than by a production rate that has missed its target every year since 2019.
None of that is a call on any of the companies named in the third exhibit. It is a statement about which question is worth doing the work on. The work this note has not done, and which would settle it, is the segment split: how much of that revenue growth is aftermarket, at what margin, and how much of it survives a delivery recovery when it finally arrives.