Jet2 cautious despite strong rebund in trave demand

by | Jul 6, 2023

(Sharecast News) – Low-cost leisure airline Jet2 reported a rebound in consumer confidence in its final results on Thursday, although an uncertain macroeconomic outlook saw it remaining cautious going forward.
The AIM-traded firm said revenue for the 12 months ended 31 March totalled £5.03bn, up from £1.23bn in the 2022 financial year.

It said operating profit also turned around from a loss of £323.9m in 2022 to a profit of £394m for 2023, while profit before tax swung from a loss of £388.8m to £371m.

The company’s basic earnings per share reached 135.4p, in contrast to a basic loss per share of 147p in the prior year.

Additionally, Jet2 announced a final dividend of 8p per share.

Looking ahead, Jet2 said it remained optimistic about the future of the travel industry, noting that it recently took delivery of its first Airbus A321/A320neo aircraft as it planned to expand its fleet up to 146.

Jet2 also revealed its intention to start operations from Liverpool John Lennon Airport, its 11th UK base, from March next year.

Despite evolving macroeconomic conditions, Jet2 said it believed in the resilience and popularity of the end-to-end package holiday product, especially during challenging economic times.

“On sale seat capacity for summer 2023 is currently 7.5% higher than summer 2022 at 15.29m seats,” said executive chairman Philip Meeson.

“Although average load factors are currently 0.8 percentage points behind summer 2022 at the same point, positively the mix of higher-margin package goliday customers represents over 73% of total departing passengers at present, which is over five percentage points higher than summer 2022.

“Despite the group facing various input cost pressures such as fuel, carbon taxes, a strengthened US dollar and wage increases, as well as investment to support the well-being and work-life balance of our colleagues, pricing to date for both our package holidays and flight-only products has been robust and consequently margins per booked passenger satisfactory.”

Looking ahead, Meeson said that although the airline believed that the end-to-end package holiday was a “resilient and popular” product, particularly during difficult economic times, it was cognisant of how quickly the macroeconomic environment was evolving and how that could affect consumers’ future spending.

“On that basis, and with the peak summer months of July, August and September not yet complete plus the majority of winter 2023-2024 seat capacity still to sell, it remains premature as is always the case at this time of year to provide definitive guidance as to Group profitability for the financial year ending 31 March 2024.

“For the long term our strategy remains consistent – to be the UK’s leading and best leisure travel business.”

At 1121 BST, shares in Jet2 were down 11.16% at 1,122p.

Reporting by Josh White for

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