FTAI Aviation NASDAQ: FTAI reported what management called a “solid start” to 2026, pointing to strong first-quarter growth in its Aerospace Products segment, continued progress in its Strategic Capital initiative, and advancing preparations for the commercial launch of its FTAI Power business later this year.
Adjusted EBITDA rose sequentially as Aerospace Products growth accelerated
Chief Financial Officer Nicholas McAleese said the company posted adjusted EBITDA of $325.6 million in the first quarter, up 17% from $277.2 million in the fourth quarter of 2025. McAleese broke the quarterly adjusted EBITDA into:
- $222.6 million from Aerospace Products
- $153.0 million from Aviation Leasing
- $(50.0) million from Corporate & Other, including inter-segment eliminations and start-up expenses related to the power initiative
Aerospace Products generated $222.6 million of adjusted EBITDA with an EBITDA margin of 30%, McAleese said, up 14% sequentially from $195 million in Q4 2025 and up 70% from $131 million in Q1 2025.
CEO Joe Adams said Aerospace Products revenue grew 104% year-over-year and 32% quarter-over-quarter. He attributed the quarter’s 30% EBITDA margin to a higher mix of large airline customer deals and “a larger mix of full performance restoration shop visits,” and said management expects that trend to continue as the platform scales.
Market share a central focus as module output nearly doubled
Adams said a key 2026 priority is accelerating market share gains in Aerospace Products, arguing that the company’s production and procurement capabilities and customer adoption are reaching “an inflection point.” He added that FTAI is “consciously going for a higher market share” to drive faster absolute EBITDA growth.
President David Moreno provided production details, stating the company refurbished 270 CFM56 modules in the quarter across four facilities, a 96% increase versus Q1 2025. That output represents an early step toward the company’s 2026 goal of 1,050 modules.
Moreno said commercial discussions are increasingly “larger, more programmatic partnership” opportunities as airline adoption accelerates, supported by an expanded offering that includes engine and module exchanges, engine leasing, and aircraft leasing. In response to an analyst question about facility-level production, Moreno said Montreal is the most mature shop and handles the “heaviest work scopes,” while Miami handles lighter work and Rome and Lisbon are still ramping and performing the lightest work scopes.
Adams also pointed to a parts supply deal with an OEM as a contributor to scaling output, saying, “You need parts, people, and facilities to build an engine.”
On geographic expansion, Adams and Moreno both indicated interest in adding capacity east of Rome, Italy. Adams said the company currently has “no major maintenance facilities east of Rome” and expects that to change by the time of next year’s first-quarter call.
Strategic Capital nears end of 2025 SPV deployment, 2026 SPV launch planned
In Strategic Capital, Adams said the priority is completing deployment of the 2025 special purpose vehicle and transitioning into a “harvest period” with quarterly distributions beginning after the vehicle becomes fully invested. Adams said the 2025 SPV is expected to be fully invested by the end of the second quarter.
Moreno said the company upsized the 2025 SPV warehouse debt facility at the end of March, adding $1 billion of committed capacity. The facility is now $3.5 billion across 10 lenders. He added that the 2025 SPV had closed 165 aircraft as of quarter-end, and that after a few letters of intent are finalized, “all new future aircraft will go into the 2026 SPV.”
Moreno said the company’s value-add in the harvest phase comes from “active management of maintenance events, both airframe and engines,” as well as lease extensions. He said airlines continue to show a strong desire to operate current-generation aircraft longer, particularly when they “do not have to worry about engine shop visits.”
For the next vehicle, Adams said the company is planning a first close for the 2026 SPV at the end of the second quarter, with aircraft acquisitions beginning in the third quarter. He said the investment strategy, deployment period, and size will be consistent with the 2025 SPV, and noted the Strategic Capital team has grown to more than 40 people across Dublin, Dubai, Cardiff, and New York.
FTAI Power targets Q4 commercial launch; JERA joint venture signed
Management said the FTAI Power initiative remains on track to commercially launch the Mod-1 in the fourth quarter of 2026. Moreno said prototype testing is running ahead of schedule, with major mechanical milestones completed, including testing a redesigned Mod-1 fan stage at synchronous speed. He said final testing is expected to wrap up in the third quarter and that results “have exceeded our expectations.”
Moreno also said the company has been hosting customers on-site to view the Mod-1 prototype, describing those visits as an important component of the sales process.
During the quarter, FTAI signed a joint venture agreement with JERA Group. Moreno described JERA as “one of the leading packagers for mobile gas turbines” and said JERA will be the primary partner responsible for packaging the turbine with components such as the generator and gearbox. He said the arrangement draws on JERA’s manufacturing footprint across the United States, the UAE, Canada, and China, and is intended to de-risk the supply chain and accelerate time to market.
On economics, Moreno said the joint venture does not change the company’s overall unit economics, though financial statement presentation may differ, with potentially lower revenue and an earnings contribution from a joint venture. He also said it may reduce FTAI’s required working capital for the packaging portion.
Moreno said the company is in “deep and active negotiations” with customers and that discussions are anchored by long-term service agreements (LTSAs). In response to questions about demand, he said the customer set spans four categories: hyperscalers, data center operators, gas distributors, and financial sponsors. He said FTAI expects to be “mostly sold out” of 2027 target production in the near term, with a meaningful portion of 2028 “spoken for,” and described current discussions as “multi-year, multi-block conversations.”
Moreno highlighted three key differentiators: “speed to power,” scale (including the combination of turbine and packaging capacity), and reliability, including the CFM56 platform and a maintenance model that aims to enable turbine swaps in two days. He said this maintenance approach can reduce the number of units customers need and lower operating costs.
Liquidity, leverage, insurance recoveries, and updated outlook
McAleese said the Aviation Leasing segment generated about $153 million of EBITDA, including $45 million of insurance recoveries, $12 million of gains on sale, $25 million from 2025 SPV management fees and co-investment returns, and $71 million from leasing assets held on the company’s balance sheet.
McAleese said the company expects an additional $5 million of insurance recoveries later this year, consistent with previously communicated $50 million for 2026. In response to an analyst question, he said that after the additional $5 million, the insurance claims will be complete.
On asset sales, McAleese said the company had $127.5 million in asset sale proceeds in the quarter, generating a 9% gain ($12.1 million), as it closed the first nine of 14 aircraft expected to be sold to the 2025 SPV in 2026 and divested non-core assets including airframes and an RB211 engine.
McAleese also discussed balance sheet positioning, stating the company started the year at about 2.3x leverage on an annualized basis, below its 2.5x to 3x target range with rating agencies. In April, he said the company upsized its revolving credit facility from $400 million to $2.025 billion, extended maturity through 2031, and improved pricing terms.
Adjusted free cash flow in Q1 was $158 million, McAleese said, reflecting growth investments including approximately $75 million in prepayments under a multiyear CFM56 parts agreement, about $81 million in V2500 induction prepayments, and $19 million of incremental inventory for FTAI Power. Excluding these investments, he said adjusted free cash flow would have been approximately $333 million.
Adams reaffirmed FTAI’s 2026 total segment EBITDA outlook of $1.625 billion, comprised of $1.05 billion from Aerospace Products and $575 million from Aviation Leasing. He also reiterated expectations for approximately $915 million of adjusted free cash flow in 2026.
The company also announced a dividend increase for the third consecutive quarter, raising the quarterly dividend to $0.45 per share from $0.40. Adams said the dividend will be paid May 26 to shareholders of record as of May 13.
On supply chain and cost management, Adams provided an update on PMA part approvals with the FAA, stating that Chromalloy has five parts in total under development, three of which have been approved and represent about 80% of total cost savings, while the remaining two parts are still in the approval process.
Management also addressed the geopolitical backdrop, particularly conflict in the Middle East. Adams said the company’s aerospace exposure to the region is limited, with less than 3% of its global current-generation narrow-body fleet based there, and said it has not seen “any meaningful change in shop visit demand to date.” He added that volatility can increase airline focus on liquidity, which can drive interest in sale-leaseback transactions and avoiding expensive shop visits—areas where FTAI seeks to position itself as a partner.
About FTAI Aviation NASDAQ: FTAI
FTAI Aviation NASDAQ: FTAI is a commercial aircraft leasing company that acquires, manages and leases wide-body jet aircraft to airlines globally. The company's portfolio is focused on modern, fuel-efficient Boeing models, including the 767, 777 and 787 families, which are deployed under long-term operating leases. By concentrating on in-demand wide-body assets, FTAI Aviation seeks to deliver stable cash flows through lease rentals and maintenance reserve collections while providing airlines with flexible fleet solutions.
In addition to lease origination, FTAI Aviation offers end-to-end asset management services.
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