July 23 (Reuters) - GE Aerospace raised its annual profit forecast on Tuesday on strong demand for its aftermarket services, including jet-engine parts, as a shortage of new planes prompted airlines to keep older ones in the air.
Shares of the company rose 3.5% in premarket trading.
Aircraft shortage amid robust travel demand has left airlines scrambling to expand capacity, forcing them to keep flying older jets and driving up maintenance expenses.
That is expected to boost sales for GE Aerospace's spare parts and services, which are priced at a premium. More than 70% of its commercial engine revenue comes from parts and services.
The company expects annual adjusted profit in the range of $3.95 to $4.20 per share, compared with its prior forecast of $3.80 to $4.05.
"We are accelerating our actions and leveraging Flight Deck to unlock supply constraints and fully meet customer demand," GE Aerospace CEO Larry Culp said on Tuesday.
The aerospace manufacturer also has a dominant position in the jet-engine market through CFM International, its joint venture with France's Safran SA.
CFM is an engine supplier for Boeing 737 MAX jetliners and competes with RTX's Pratt & Whitney to power Airbus' 320neo jets.
Engine makers typically sell engines to airlines at a discount and recover the money by selling parts and services over the life of the engine.
Analysts have been bullish on the prospects of the aerospace unit since GE completed its breakup into three companies focused on aviation, energy and healthcare.
GE Aerospace reported an adjusted profit of $1.20 per share, compared with $0.74 a year ago.
However, like the rest of the industry, GE has suffered from a shortage of parts, a problem highlighted by the aerospace industry at the Farnborough airshow.
The company's adjusted revenue for the second quarter ended June 30 rose 4% to $8.22 billion.
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