By Joanna Plucinska and Yadarisa Shabong

(Reuters) -Wizz Air lowered its annual profit forecast on Thursday after reporting a 44% drop in its first-quarter operating profit, partly owing to costs related to Pratt & Whitney engine troubles and one-off wet leases to bolster capacity.

The shares tumbled 15% by 0802 GMT.

The low-cost airline, which flies an all-Airbus fleet, has faced challenges related to Pratt and Whitney RTX engines, with 46 of its planes set to be grounded for inspections this summer, placing constraints on capacity.

European airlines have faced a difficult first half of the year because of spiralling costs and normalising customer demand after an initial post-pandemic boom. Air France-KLM, Lufthansa and Ryanair all reported challenging second quarters.

Wizz Air Chief Executive Jozsef Varadi said the airline will have to moderate its expectations.

"Our fares are still improving, but our competitors are dropping theirs and that impacts us," Varadi said.

The budget carrier forecast net income for the year in the range of 350 million euros to 450 million euros ($379 million to $487 million), down from its previous forecast of 500 million euros to 600 million euros.

Operating profit in the company's first quarter to June 30 was 44.6 million euros, against the 144.3 million euro consensus in an LSEG analyst poll.

Analysts pointed to higher than expected costs and warned that the cut in the annual forecast would probably be poorly received by investors.

PLANE DELIVERIES TO BOOST CAPACITY

Wizz Air said demand remained strong and that it still planned substantial capacity growth in coming years, with new Airbus planes boosting its fleet.

The aviation sector has struggled with delays from manufacturers Boeing and Airbus in the years since the COVID-19 pandemic, with constraints at Boeing compounded by safety concerns.

Airbus warned of further delivery delays in June and said it faced supply chain challenges.

Shares in Europe's airline stocks are broadly down in the Past six months but some have said that a return to a more normal delivery schedules should help.

"We remain on track to return to annual capacity growth in 2026, underpinned by the pipeline of Airbus deliveries," Varadi said in a statement.

He added that issues with Pratt & Whitney engines remained "unpredictable" and wet leases to protect Wizz Air's routes and capacity led to a cost hit this quarter and will spill over into the second quarter.

($1 = 0.9239 euros)

(Reporting by Joanna Plucinska and Yadarisa Shabong in BengaluruEditing by David Goodman and Sharon Singleton)