CHICAGO, July 19 (Reuters) - GE Aerospace on

Friday unveiled a plan to invest more than $1 billion over five

years to expand its maintenance, repair, and overhaul (MRO)

facilities worldwide and reduce turnaround times for its

customers.

There has been a surge in demand for after-market services

as a strong rebound in travel and a lack of new planes due to

production and engine issues has forced airlines to keep older

jets in the air for longer.

However, persistent shortages of labor, parts and raw

material have made it harder to keep up with customer demand.

As industry leaders gather at 2024's most prominent air show

in Farnborough, England next week, engine repair delays will be

one of the top items on their agenda.

Limited capacity at MRO shops has become a major constraint

for the global airline industry. Some airline CEOs have called

the engine repair delays a bigger problem than production issues

at Airbus and Boeing ( BA ).

GE Aerospace has set a goal to reduce overall turnaround

time at its repair shops by 30% from a year ago. As part of the

investment, the company will add more engine test cells and

cutting-edge technology at its repair shops.

The company said previously it would invest more than $650

million this year in its manufacturing facilities and supply

chain to ramp up production and in March, it told investors it

planned to increase investments to reduce turnaround time at its

repair shops. However, it did not disclose the dollar value of

its planned investments.

The lion's share of the funds will go to MRO facilities for

LEAP engines, which power Airbus and Boeing ( BA ) narrowbody aircraft.

The company co-produces the engine type with France's Safran

through their CFM International joint venture.

"Our customers are experiencing strong air travel demand,"

said Russell Stokes, head of GE Aerospace's commercial engines

and services.

"We are investing...so we can meet their growing needs and

keep their planes flying safely and reliably," he said in a

statement.

After the pandemic, turnaround times at engine repair shops

rose by 35% for legacy engines and more than 150% for

new-generation engines, according to consulting firm Bain &

Company. On average, it is taking two to three months for

airlines just to secure an MRO slot, the firm said.

GE Aerospace, which became an independent company this year,

has a dominant share in the engine market for narrowbody jets

and enjoys a strong position in widebodies. More than 70% of its

commercial engine revenue comes from parts and services.

The company said it will spend $250 million this year on

upgrades. It will open a facility in September near Cincinnati,

Ohio that will be equipped with a technology to detect chemical

anomalies in metal parts that is also used to identify forged

artwork.