(Reuters) - Wizz Air ( WZZAF ) on Tuesday said it had signed a new support agreement with defence and aerospace firm RTX's Pratt & Whitney amid engine woes, adding that it expects 40 of its planes to stay grounded through fiscal year 2026.

The low-cost Hungarian airline said Pratt & Whitney will provide commercial support, including operational assistance and a compensation package for direct costs related to grounded aircraft, through the end of 2026.

Budapest-headquartered Wizz Air ( WZZAF ), which flies an all-Airbus fleet, has had to navigate additional challenges after Pratt & Whitney in 2023 said more than 1,000 engines needed to be removed from Airbus planes and checked for microscopic cracks.

In September 2023, Wizz Air ( WZZAF ) had estimated a potential 10% capacity reduction in the second half of fiscal 2024, due to the inspection of Pratt & Whitney's turbofans.

In November this year, it posted a bigger-than-expected drop in first-half profit, citing ongoing issues with engine inspections that grounded its Airbus planes and the impact of conflict in the Middle East.

Wizz Air ( WZZAF ) also said it expects to return to growth by taking 50 new Airbus A321NEO deliveries and growing seat capacity by about 20% during 2026.

(Reporting by Yamini Kalia and Chandini Monnappa in Bengaluru; Editing by Janane Venkatraman and Mrigank Dhaniwala)