Oct 3 (Reuters) - The head of European budget carrier Wizz Air voiced confidence that a troubled jet engine developed by Pratt & Whitney would overcome teething problems in the long term, while noting the glitches were yielding significant penalty payments.

Hungary-based Wizz Air is the second-largest operator for the Geared Turbofan engine, which is in the midst of a second recall over production defects on top of a pattern of heavier than expected maintenance that has left some jets grounded.

"Long term, I am totally confident in the GTF. Short term? We don't know what we don't know, so we try to understand the issues," CEO and co-founder Jozsef Varadi said in an interview.

Pratt & Whitney parent RTX said last month it would have to pull 600 to 700 GTF engines from Airbus A320neo jets for quality inspections over the next three years following the discovery of a rare powder-metal defect that can cause cracks.

Wizz Air told analysts last week it expected a Pratt service bulletin within 1-1.5 months detailing the serial numbers of affected engines. But doubts remain over repair capacity and the availability of spare engines to keep planes flying.

"I think we are in the final stage of the mapping process to see what issues we have and how to best address those issues ... through engine shop visits," Varadi told Reuters.

Currently the airline has three airplanes grounded as a result of the need for engine maintenance visits, which are on average taking 270 days, he said, rather than the usual 60.

Wizz also told analysts last week the latest combustor included in a configuration called Block D was "not meeting full expectations, especially in severe environment(s)".

Varadi declined to discuss in detail what penalties Wizz was receiving from Pratt, but said: "You should assume a proper compensation given that we are one of their largest customers".

Wizz Air has said it estimates a potential 10% capacity cut in the second half of fiscal 2024, due to GTF inspections.

No comment was immediately available from Pratt and Whitney. (Reporting by Tim Hepher, Joanna Plucinska, Michael Kahn; Editing by David Gregorio)