NEW YORK (CNN/Money) - General Electric Co.'s aircraft engine unit expects to cut 8 percent to 10 percent of its staff by the end of next year unless the market for commercial aircraft improves.

GE spokesman Rick Kennedy said Wednesday the division expects to cut 1,000 of 26,585 jobs by the end of this year. He said it would cut another 1,200 to 1,800 jobs in 2003, "if current conditions in the commercial aviation business continue."

Kennedy said the cuts would include both salaried and hourly staff and would be accomplished through a combination of retirements and layoffs.

Demand for new aircraft fell sharply in the wake of the Sept. 11 terrorist attack. The major U.S. airlines say they're not seeing the expected improvement in air travel this year, and have announced plans to cut capacity this year and next. Boeing Co., the world's largest commercial aircraft manufacturer, also said last week it sees a slower-than-expected recovery in the market for new planes.

The aircraft engine unit had 2001 revenue of $11.4 billion, about 9 percent of the company's total, and an operating profit of $2.6 billion.

Shares of GE (GE: Research, Estimates), a component of the Dow Jones industrial average, gained 40 cents to close Tuesday at $23.35.