(Reuters) -GE Aerospace on Thursday forecast a stronger profit for the year after its fourth-quarter earnings exceeded Wall Street estimates as strong travel demand amid persistent shortages of new aircraft bolstered sales of its high-margin parts and services.

The company's shares rose as much as much as 7% in trading before the bell after GE Aerospace also announced plans to increase its share buybacks to $7 billion in 2025 and dividend by 30%.

Production challenges at Boeing and Airbus have resulted in longer wait times for airlines to take delivery of new jets, prompting them to operate older, maintenance-intensive aircraft to meet demand for air travel.

That has helped companies such as GE Aerospace, which typically sells its engines to airlines at a discount and recovers the costs through lucrative contracts with airlines for parts and services over the lifespan of the product.

Profit at GE Aerospace's commercial engines and services segment rose 44% to $2.16 billion on revenue of $7.65 billion, which was up 19% from a year earlier.

The company's commercial engine division gets more than 70% of its revenue from the sale of parts and services.

The aerospace manufacturer holds a dominant position in the jet engine market through CFM International, its joint venture with France's Safran SA.

The company expects 2025 profit in the range of $5.10 per share to $5.45 per share, compared with analysts' average estimates of $5.23 per share, according to data compiled by LSEG.

However, GE Aerospace continues to grapple with supply chain constraints, which have led to delays in jet engine deliveries over the past year.

In October, GE reported that these supply issues were affecting the shipment of engines for both narrowbody and widebody jets.

GE Aerospace reported an adjusted profit of $1.32 per share, beating analysts' average expectations of $1.04 per share.

The company's adjusted revenue for the fourth quarter ended Dec. 31 rose 16% to $9.88 billion, compared with Wall Street expectations of $9.51 billion.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Anil D'Silva)