Wizz Air Sticks With Pratt & Whitney Engines for New Airbus Jets

Wizz Air has chosen Pratt & Whitney to supply engines for its new Airbus aircraft, opting to continue its relationship with the manufacturer despite recent engine issues that led to groundings and impacted the airline's growth. The decision, announced at the Paris Air Show, concludes a competitive bidding process that included CFM, a joint venture between Safran SA and General Electric Co.

Analysis

Wizz Air Holdings Plc's decision to select Pratt & Whitney engines for its new Airbus SE aircraft, despite prior manufacturing issues that led to costly groundings and impacted the carrier's growth, signals a significant vote of confidence in the engine maker or reflects a highly competitive bid. This outcome, announced at the Paris Air Show, concludes a tender launched last summer where Pratt & Whitney prevailed over CFM, a joint venture between Safran SA and General Electric Co. The selection has direct implications for the competitive landscape in aircraft engine manufacturing, representing a notable win for Pratt & Whitney and a corresponding loss for the GE-Safran partnership for this specific Wizz Air order. The general sentiment score of 0.4, labeled "moderately positive," likely reflects the resolution for Wizz Air and the contract win for Pratt & Whitney, while the specific negative sentiment of -0.4 for GE underscores the impact on its joint venture from not securing the deal.

Key Decisions for Investors

• Investors in RTX Corporation (Pratt & Whitney's parent) should view this as a positive reaffirmation of a key customer relationship, potentially bolstering P&W's aerospace segment outlook despite past engine issues.
• General Electric investors should note the lost bid for its CFM joint venture with Safran SA, which represents a competitive setback for this specific Wizz Air order, and monitor CFM's broader market share trends in narrow-body aircraft engines.
• Wizz Air investors should acknowledge the resolution of this engine tender as a step towards fleet expansion, but must remain vigilant regarding the operational performance and maintenance costs associated with Pratt & Whitney engines given their recent history and the airline's prior experiences.