Portfolio Manager Insights

The aerospace industry’s flight path to recovery

With aircraft production rebounding and demand for maintenance surging, both original equipment and aftermarket aerospace companies are gaining altitude, says Fidelity’s Clayton Pfannenstiel.

By: Clayton Pfannenstiel
Updated: 11/10/2025
  • Commercial aerospace is poised for a new era of growth and opportunity, according to Fidelity Portfolio Manager Clayton Pfannenstiel, who feels that original equipment and aftermarket firms are well-positioned amid renewed aircraft production and heightened demand for maintenance services.
  • “Like a twin-engine aircraft, these two industry segments are throttling up to lift the aerospace business, poised to ascend amid a global rebound in travel and airlines adapting to evolving fleet demands,” says Pfannenstiel, who co-manages Fidelity Advisor® Industrials Fund with David Wagner.
  • In helming the sector-focused fund, Pfannenstiel invests when he believes a stock’s price becomes disconnected from the company’s intrinsic (fair) value, a dynamic that often occurs at cyclical extremes because of market overreaction. As he sees it, this can present opportunities for disciplined investors with a time horizon that spans a full business cycle.
  • Among original equipment stocks within the portfolio as of September 30, Pfannenstiel notes that Boeing and Howmet have mounted a resurgence by overcoming pandemic-era turbulence, notably production disruption and halts. Meanwhile, on the aftermarket side, GE Aerospace is thriving as airlines extend the lifespan of aging fleets.
  • “Boeing, long scrutinized for its manufacturing challenges, now appears to be stabilizing under new leadership,” says Pfannenstiel. “CEO Kelly Ortberg’s strategic capital raise in late 2024 and steady progress toward improved production rates have restored confidence in the company’s trajectory.”
  • He adds that with a backlog stretching well into the 2030s, Boeing’s cash-flow outlook is increasingly robust, a promising sign for investors.
  • Meanwhile, Howmet, a critical original equipment supplier, is positioned for growth as widebody aircraft production ramps up to meet rising demand for international travel.
  • These aircraft – essential for long-haul routes – are in short supply, and Howmet’s components have gained prominence,” notes Pfannenstiel. “In fact, our analysis suggests that the firm’s content is three times more prevalent in widebody models than in narrowbody aircraft, further validating the firm’s upside potential and making it a key player in the original-equipment recovery story.”
  • On the other hand, he highlights that aftermarket commercial aerospace businesses have experienced an elongated growth phase as carriers, forced to extend the life of their fleets due to the pandemic, are now operating aircraft with an average age of 12.8 years, up from 10.7 in 2017.
  • With roughly 80% of these planes out of warranty, a surge in demand for maintenance services has been created,” Pfannenstiel says.
  • He adds that this backdrop supports GE Aerospace, a recognized leader in the aftermarket space, valued for its expertise in maintenance and repair services. In his view, the company is well-positioned amid sustained airline spending in the years ahead, as carriers prioritize operational efficiency and safety.
  • Despite recent aggressive projections for new aircraft production, the supply shortage suggests the aerospace industry’s recovery is not a single-engine effort, but rather a dual-engine growth story powered by sustained strength in both the original equipment and aftermarket segments,” concludes Pfannenstiel.
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