A propulsion system for an aircraft includes a fan that is rotatable about a fan axis, a core engine that is configured for generating a gas flow utilized to generate shaft power for driving the fan, a nacelle that surrounds the core engine and the fan, a condenser where water in the gas flow is condensed into a liquid form, an exhaust duct assembly where the gas flow exhausted from the core engine is directed to the condenser, an ejector duct where a portion of a bypass airflow is thermally communicated with the condenser to cool the gas flow, and an evaporator assembly that is in thermal communication with the exhaust duct where water recovered by the condenser is heated to generate a steam flow that is subsequently communicated to the core engine.