FTAI Update - Recent Cash Flow Generation is a Mirage

11 September 2025, 18:15pm GMT

New on FTAI Aviation (Nasdaq:FTAI).

Our analysis reveals cash flow generation behind the recent share price surge is a mirage – built on FTAI liquidating its engine fleet and masked by deceptive disclosures.

Inventories look increasingly at risk of impairment. We still believe EBITDA is hugely inflated.

FTAI’s stock is up nearly 50% on recent results, in which it reported $370m of so-called Adjusted Free Cash flow for the first half of 2025.

Analysts interpreted this as the end of concerns over FTAI’s cash flow, declaring that the investment debate is beginning to turn back towards the bulls.

But dig deeper, and much of this cash flow in H1 appears to have come from liquidating its engine fleet – which shrank by roughly 70 engines during the period. That and a $54m one-off Russian insurance payment.

Obviously, these are not recurring profits of the business.

Investors missed this because FTAI’s disclosures appear designed to mislead. For example, the Company labels its capital expenditures as “replacement capex”, implying that they are sufficient to sustain the business. But the footnotes reveal this is not the case.

After properly adjusting for fleet shrinkage, we calculate that true underlying free cash flow was just $210 million in H1 2025 — well below the headline figure and reported EBITDA.

Our calculation is highly generous, as it gives full credit to FTAI’s inventory values, which have continued to balloon and, in our view, are increasing at risk of impairment.

Investors who might disregard our own analysis should note the gross inconsistencies in FTAI’s own disclosures. Since February, FTAI has quietly and materially rewritten the rules for calculating Adjusted Free Cash Flow. The result? A conveniently higher number that papers over what otherwise would have been a massive guidance miss.

In short, we believe the very metric FTAI introduced to defend concerns around its accounting is – in itself – entirely bogus. Far from putting the bear case to rest, FTAI’s recent results, combined with the recent change in auditor, strengthen our belief that its EBITDA is substantially inflated.

Report at snowcapresearch.com