17th Jun 2025 11:51
(Alliance News) - Wizz Air Holdings PLC on Tuesday said it has selected RTX Corp's Pratt & Whitney to supply engines for 177 Airbus SE aircraft.
The Budapest-based carrier said it has chosen the Pratt & Whitney PW1100G-JM geared turbofan engine for its 177 Airbus A321neo aircraft, following shareholder approval of the purchase of the aircraft.
Wizz Air noted that it previously chose Pratt & Whitney's GTF engine for its 276 Airbus A320neo, A321neo and A321XLR aircraft in 2016 and 2020.
East Hartford, Connecticut-based Pratt & Whitney will provide Wizz Air with engine maintenance through a long-term service agreement.
"Our relationship with Pratt & Whitney has been instrumental in supporting our growth strategy, which will enable Wizz Air to have a fleet of 500 aircraft within a decade," said Chief Executive Officer Jozsef Varadi.
Wizz Air was lowered by Moody's Ratings on Tuesday, amid an aircraft grounding that could lead to higher costs and keep a lid on the budget carrier's growth plans.
Moody's lowered Wizz Air's long-term corporate family rating to Ba2 from Ba1. The outlook on the rating remains at negative.
"Today's rating action reflects the company's ongoing weak point-in-time credit metrics with a slower than expected recovery driven by the high level of groundings from the GTF engine issue that lead to higher costs beyond the agreed compensation levels," Moody's analyst Dirk Goedde said.
"The grounding of aircraft has significantly hindered Wizz Air's growth plans, which are essential for improving profitability. The airline relies on growth to offset rising operating and inflation-related costs, but this strategy is undermined by its inability to fully utilize its fleet."
Wizz suffered from having 42 aircraft grounded as of the end of March due to GTF engine issues. This since was reduced to 37 in May and is expected to be reduced to 34 by the end of the first half of the current financial year.
Earlier this month, it posted pretax profit of EUR19.7 million for the financial year that ended March 31, down 94% from EUR341.1 million, despite a 3.8% rise in revenue to EUR5.27 billion from EUR5.07 billion, amid higher costs. Net profit was higher than pretax profit due to tax credits.
Moody's said: "Wizz Air's financial performance in its fiscal year 2025 was weaker than expected and its financial metrics remained outside of the Ba1 rating category. Despite Wizz Air growing its total fleet, the full-year effect of the groundings from the GTF engine issue has reduced the planned expansion of its operating fleet so that the company's capacity as measured by available seat kilometres was flat in FY25.
"While we believe that the company can return to its previous growth pattern from new deliveries and the grounded part of its fleet being gradually reduced, credit metrics will remain subdued in the next 12-18 months."
Positively, Wizz has a "superior cost base" and an efficient fleet. Its focus on a growing central and eastern European aviation sector also leaves it well-placed.
"Wizz Air's rating is also supported by the company's strong liquidity profile. The company had around EUR1.7 billion available cash and cash equivalents on balance sheet as per end of March 2025 or 32% of fiscal year 2025 revenue. Liquidity is deemed more than sufficient to manoeuvre through a 12-month period of weak operating conditions if market conditions deteriorate," Moody's added.
Shares in Wizz Air traded 3.1% lower at 1,105.77 pence each in London on Tuesday morning. The stock is down some 30% so far this month, amid a 28% plunge on June 5 alone, the day it released annual results.
Middle East tensions have also weighed on travel sector shares. Israel last week launched strikes on targets in Iran. Tehran responded with strikes of its own.
Wizz Air suspended all flights to and from Tel Aviv Ben Gurion Airport and European flights to and from Amman Queen Alia International Airport, in Jordan, until September 15.
By Michael Hennessey and Eric Cunha
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