Adds more comments and background details throughout

By Rajesh Kumar Singh

CHICAGO, May 27 (Reuters) - GE Aerospace GE.N has not seen airlines pull back on engine maintenance or parts orders despite higher fuel prices and softer flight departures, CEO Larry Culp said on Wednesday, signaling continued strength in the aircraft engine maker's high-margin aftermarket business.

Speaking at a Bernstein investor conference, Culp said departures had softened over the past eight weeks, with growth now "relatively flat." But he said GE Aerospace had seen no operational impact or change in commercial behavior from airline customers.

"We feel very good about the second quarter," Culp said, citing continued strength in spare-parts orders and shop-visit activity.

Culp said parked aircraft had declined in May from April and were down from the start of the year, a sign GE Aerospace does not see a looming wave of aircraft retirements.

Spare-parts orders, which rose 30% in the first quarter, have grown closer to 40% over the past roughly 60 days, while GE is seeing more engines taken off aircraft for maintenance, he said.

Aircraft departures are a key driver of its services business, as more flying increases engine wear and maintenance needs. But GE Aerospace has said the impact on services revenue and profit this year should be limited because much of its 2026 maintenance workload is already locked in and demand for spare parts continues to outstrip supply.

The engine maker said last month it remained on track to hit the high end of its 2026 profit outlook, while warning that elevated oil prices, fuel supply constraints and slower global growth had made the backdrop more uncertain. The company has forecast adjusted profit of $7.10 to $7.40 per share for 2026.

SUPPLY CHAIN PRESSURE

Culp said strong demand for both new engines and aftermarket work was putting stress on GE's supply chain, with some suppliers hesitant to invest because they remain skeptical of aircraft production ramp-up plans. But he said suppliers also need to account for rising demand from GE's installed engine base, not just Boeing or Airbus production rates.

GE and France's Safran SAF.PA co-own CFM International, which makes engines for Boeing BA.N and Airbus AIR.PA narrowbody jets. Culp suggested relations with Airbus had improved after earlier tensions over engine supply, saying the companies had moved away from "arm wrestling" and public finger-pointing toward more direct problem-solving.

Culp said LEAP shop visits are shifting from early, lighter maintenance work to more extensive performance-restoration visits, which should bring in more revenue. He said GE has not yet seen the full benefit of price increases in some long-term LEAP aftermarket contracts.