GE warns Iran War fallout could hurt aftermarket business but maintains 2026 guidance

The engine manufacturer says any impact would be delayed and that aftermarket demand would eventually snap back

GE Aviation is maintaining its full-year revenue and profit expectations despite warning that prolonged elevated fuel costs and regional fuel shortages due to the war against Iran could impact the company’s aftermarket services business.

The Ohio engine maker is “contemplating a range of possibilities” related to the war’s fallout and has already started working to keep a lid on costs.

“We are mindful of the risks that we may have in the customer base,” GE chief executive Larry Culp said on 21 April during the company’s first-quarter earnings call. “We are also putting our spending under greater scrutiny… Spending in a more-cautious fashion.”

GE now anticipates total global airline flights in 2026 will remain flat or possibly increase slightly year on year, revised from its previous expectation that flights will increase in the mid-single-digit range. Flights in the Middle East will likely end the year down in the double-digit range, GE predicts.

Many airlines, especially those in the Middle East, have already pulled down capacity or cancelled growth plans in response to elevated fuel costs. Last week, one gallon of jet fuel cost about $4.40, more than double the price in January, according to IATA.

“Between [fuel] inflation and potential scarcity, we could see some near-term airline shifts… in the later summer, early fall,” says Culp.

Alongside capacity cuts, airlines could start cutting aftermarket spending, with GE’s first-quarter financial filing citing possible “lower volume related to shop visits, spare parts and spare engines, and lower profitability of our long term contracts, as well as customer credit implications”.

Such shifts would not likely impact GE immediately but rather become evident over time as reduced aftermarket demand works through its operation.

“There will be a lag effect,” but demand would then likely snap back, Culp says.

“We feel strongly about our ability to deliver the high end of our guide for 2026,” he adds. “We are also assuming that by the end of the summer we are on our way back to more normal conditions.”

GE’s guidance calls for its 2026 adjusted revenue to increase in the low-double-digit range year on year and for the company to turn a $9.85-10.25 billion 2026 operating profit, which would be up 8-13% year on year.

“We remain confident in our ability to navigate this with our young and diverse fleet, and we are also proactively taking action on costs,” GE says.

GE’s commercial aftermarket business is incredibly important to its broader commercial aviation division. Those aftermarket services generated $6.8 billion in first-quarter revenue, up 39% year on year and accounting for 76% of the commercial business’s total $8.9 billion in revenue.