By Rajesh Kumar Singh and Shivansh Tiwary
April 21 (Reuters) – GE Aerospace said on Tuesday it was on track to hit the high end of its 2026 profit outlook, but is bracing for a tougher backdrop of elevated oil prices, fuel supply constraints and slower global growth, though it does not expect a recession.
The engine maker’s caution comes as a spike in jet fuel prices following the Iran war is emerging as a fresh stress test for airlines — its core customers — squeezing margins and prompting capacity cuts in some markets.
GE Aerospace, which has forecast adjusted profit of $7.10 to $7.40 per share for 2026, said its outlook now assumes Brent crude prices remain elevated through the third quarter before easing by year end, alongside near-term constraints on fuel availability.
It also expects flat to low-single-digit growth in flight departures this year, down from an earlier mid-single-digit estimate, signalling a more cautious view of airline activity.
SERVICES DEMAND HOLDS UP
Aircraft departures are a key driver of GE’s services business, as more flying leads to greater engine wear and maintenance. But the slowdown is expected to be uneven, with sharper near-term pressure in the Middle East while other regions remain more resilient, the company said.
GE expects only a limited impact on its services revenue and profit this year, reflecting the stickiness of long-term maintenance contracts tied to engines already in service.
Historically, servicing demand has lagged downturns in air travel by about a year, providing a buffer even if airline activity weakens.
That cushion is reinforced by strong underlying demand. Much of GE’s 2026 maintenance workload is already effectively locked in, while demand for spare parts is running ahead of supply, with most inventory committed for the current quarter.
“With the dynamic geopolitical landscape, we’re holding our full-year guidance across the board and are trending toward the high end of the range given our strong start to the year,” CEO Larry Culp said in a statement.
GE Aerospace shares were up about 2.4% in premarket trading.
Tight aircraft supply is also working in GE’s favor. Airlines are extending the lives of existing fleets as deliveries from Boeing and Airbus continue to lag demand, sustaining the need for engine maintenance. GE’s engines power a large share of global flights, giving it broad exposure to that activity.
At the same time, the company is seeing gradual improvement in its own supply chain, helping it ramp up output. Engine deliveries rose sharply in the quarter, supported by better material availability.
GE reported adjusted first-quarter earnings of $1.86 per share, beating analysts’ expectation of $1.60, according to LSEG data.
(Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary in Bengaluru. Editing by Arun Koyyur and Mark Potter)
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