Tourlite Capital highlights FTAI Aviation as key driver of Q1 2026 returns
Investment manager cites FTAI’s expanding market share in CFM56 components and new joint venture with Jereh Group as catalysts for growth, while noting broader portfolio rotation toward artificial intelligence stocks.
Tourlite Capital Management reported a 16.9% return for the Tourlite Fund, LP in the first quarter of 2026, significantly outperforming the S&P 500 Index, which fell 4.4%, and the Russell 2000, which rose 0.9%. The fund’s annualised return since inception stands at 11.9%, compared to 11.2% and 6.3% for the respective benchmark indices. The investor letter, released ahead of the second quarter, noted that macroeconomic and geopolitical volatility continues to weigh on the global economy, with pressure on oil markets persisting despite signs of de-escalation in regional conflicts.
FTAI Aviation Ltd (NASDAQ:FTAI) was identified as a notable contributor to the fund’s performance, driven by strong results amid ongoing supply constraints in the aerospace and engine markets. Leveraging lower-cost Maintenance, Repair, and Exchange (MRE) solutions, the company has increased its share of the CFM56 aftermarket to approximately 12%, up from 5% two years prior. FTAI currently operates at 55% of its existing capacity and has set a long-term target of capturing 25% of the market.
To support production scaling, FTAI announced a joint venture in late March with Jereh Group to manufacture Mod-1 CFM56 aeroderivative units. The partnership aims to deliver 100 units by 2027, with management projecting an average selling price of $25 million per unit and EBITDA margins of 40%. Tourlite estimates that FTAI Power represents a $1 billion EBITDA opportunity for the coming year, a figure the firm believes is largely overlooked in current analyst consensus estimates for 2027.
The letter also highlighted operational adjustments, noting that FTAI has conceded some margin to secure a partnership with a major US airline. However, the broader adoption of Parts Manufacturer Approval (PMA) components is expected to materially enhance EBITDA per module. Additionally, the company is nearing the full deployment of its Strategic Capital Initiative I and plans to launch SCI II in the third quarter, with potential for power-specific vehicles to further optimise growth.
Despite the positive outlook for FTAI, Tourlite noted that 56 hedge fund portfolios held the stock at the end of the first quarter, unchanged from the previous period. The firm stated that while FTAI holds significant potential, it believes certain artificial intelligence stocks offer greater upside potential with less downside risk, reflecting a strategic preference for the technology sector in the current environment. FTAI Aviation shares closed at $260.34 on May 29, 2026, with a market capitalisation of $26.71 billion.
