Wizz Air Holdings PLC (AIM:WIZZ) may not be as badly impacted by checks for issues in Pratt & Whitney (P&W) engines as originally expected, analysts have said.
Some Wizz aircraft will ultimately be grounded due to advanced checks for potential microscopic issues in P&W geared turbofan engines, Liberum analysts acknowledged.
However, the budget airline’s ability to mitigate the impact of these could well be stronger than previously anticipated.
“Management has some levers to pull to mitigate the impact, such as extending leases of aircraft due to leave the fleet over the next year,” the bank pointed out.
“The group has also benefitted from investment in additional spare engines.”
Liberum upgraded Wizz Air from a ‘sell’ to a ‘hold’ rating as a result, adding recent share price falls had taken the stock below the investment bank’s target value of 2,000p.
Wizz Air is also one of P&W’s largest customers, Liberum continued, and the fact it is yet to choose engines for its latest order of Airbus Group (EPA:AIR) A321neos could see the airline prioritised for checks.
P&W parent RTX flagged potential issues with thousands of its engines, used primarily in the A320neo family of aircraft, in July.
Having received shipments of several variants on the jet between 2015 and 2021, which the issue is said to have potentially affected, Wizz Air is among airlines which will have to ground aircraft over the coming years as checks take place.
Shares in Wizz Air rose by 1% on Wednesday to 1,935.50p.