MRO Memo: Wizz Air Debates Merits Of Legacy Versus New-Gen Engines

The chief executive of European LCC Wizz Air has reminded investors of the tradeoffs associated with new engine technologies such as the Pratt & Whitney geared turbofan (GTF), which has caused numerous groundings across the airline’s Airbus A320neo-family fleet.

“It’s not like you just get fuel burn [benefits] as a gift,” CEO József Váradi said, noting the higher capital costs of new-generation engines as well as lower durability due to hotter operating temperatures.

“What you see coming through the fuel costs, you’re going to get some of it as a penalty on non-fuel costs,” he said on the airline’s recent third-quarter earnings call. “You really have to look at the two combined.”

Wizz Air aims to have all its GTF-powered aircraft back in service by the end of 2027, although there were questions about whether the LCC is being too quick to phase out current-generation A320-family aircraft.

“You seem in a hurry to get rid of the Ceos, but ... the maintenance burden against the fuel price makes Ceos better aircraft than Neos at this fuel price,” argued Barclays analyst Andrew Lobbenberg on the Q&A portion of the call, adding, “When you get rid of the [A320ceo] you take a big penalty on the lease return costs—why did you not go for more aggressive deferrals of new deliveries and keep hold of the Ceos for longer?”

Váradi partially agreed, saying that at current, relatively low fuel prices, the economics of the A321ceo and A321neo are similar, or “pretty much a wash.”

However, he also emphasized that this is only true for the current maturity of the engine, and that once the upgraded GTF Advantage comes out, there will be a clear winner.

“The moment we get to Advantage, we think the equation flips structurally. There is no more debate on fuel price and who is better, which aircraft is better, Ceo or Neo. The Neo at that point will prevail.”