By Rajesh Kumar Singh and Shivansh Tiwary
Oct 20 (Reuters) – GE Aerospace on Tuesday raised its 2026 profit forecast for the second time this year, as demand for aircraft engine repairs and spare parts remained strong despite surging fuel costs that have squeezed airline profits.
Airlines worldwide are cutting costs and capacity to protect their profits after the war in Iran disrupted oil shipping routes, driving up jet fuel costs and adding to pressure on the industry.
The cuts pose a risk to engine makers, as fewer flights could eventually mean less demand for repairs and spare parts. But airlines are holding on to their aircraft, while a backlog of engines awaiting repairs is helping sustain maintenance demand.
GE Aerospace now expects adjusted earnings of $8.00 to $8.10 per share in 2026, up from its previous forecast of $7.65 to $7.85 and above analysts’ consensus estimate of $7.92, according to data compiled by LSEG.
Revenue at its commercial engines and services business rose 21% to $10.34 billion in the third quarter. Within that business, services revenue climbed 17%, with spare-parts revenue growing more than 20%.
GE warned, however, that prolonged high fuel prices could lead airlines to reduce flying, weakening demand for engine repairs, spare parts and spare engines. The company said the Middle East conflict had not materially affected its operations through September.
Its shares fell about 1.6% in premarket trading.
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Last month, GE Aerospace finance chief Rahul Ghai said aircraft retirements had fallen about 10% from a year earlier, while the number of engines removed from aircraft but still waiting to enter GE’s repair shops had risen nearly 60%.
GE’s maintenance business has grown much faster than flying activity. The company said commercial flight departures increased only slightly in the first nine months of 2026, while its commercial engine services revenue jumped 26%.
The company expects commercial services revenue to grow at a low-double-digit pace in 2027, supported by a backlog exceeding $170 billion.
Through CFM International, its joint venture with France’s Safran, GE is a leading supplier of engines for narrowbody jets and a major player in the widebody market. Services and spare parts account for more than 70% of its commercial engine revenue.
GE reported adjusted earnings of $2.25 per share for the September quarter, beating Wall Street expectations of $2.01.
(Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary in Bengaluru; Editing by Anil D’Silva and Louise Heavens)
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