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Jet2 raises annual profit expectation after return to profit

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Holiday company Jet2 has said its full-year figures will be better than expected after a profit in the first half, despite taking a more than £50 million hit from airport chaos.

But it warned profit margins could come under pressure from a weaker pound, along with rising costs, including fuel and staff wages.

Jet2 reported a pre-tax profit of £450.7 million for the six months ended September 30, compared to a loss of £205.8 million a year earlier.

It said profit before currency effects was £505 million against a loss of £195.1 million.

The company said it was “a difficult return to normal operations”, with delays caused by the cost of airport disruptions and staff shortages, and compensation costs in excess of £50m in the first half.

In-flight sales were also impacted by difficulties sourcing products amid supply chain disruptions.

Despite the industry-wide crisis, the group said airline seat capacity had increased by 14% compared to the summer before Covid arrived, with holiday demand rising after pandemic restrictions were lifted.

It also revealed that the cost of its package holidays rose by an average of 5% to £782 in the first half, offset by rising inflation and holidaymakers choosing more expensive destinations.

Philip Mason, Executive Chairman, said: “Given strong customer demand, particularly for package holidays, as well as a strong pricing environment and cost containment, the significantly improved financial performance compared to the recent Covid-affected summer season, but also relative to pre covid summer 2019.

The market is catching up on the winter season, while next year summer seat capacity will increase by 5% – about a fifth of what it was in the summer of 2019 before the pandemic.

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Mr Mason said: “With bookings for winter 2022/23 optimistic and prices remaining strong, but given that the significant post-Christmas booking period is yet to come, we are currently looking at group earnings ahead of FX revaluations. are on track to exceed current average market expectations for 2020. and taxes for the year ended March 31, 2023.

He added: “However, the group is under pressure from input costs, including fuel, carbon, a stronger US dollar and wage increases, as well as investments to ensure that our employees can grow and have a balanced lifestyle, further increasing our operational flexibility. increases.

“From this, we conclude that margins may come under pressure, but encouragingly, the strength of our post-Covid recovery underscores our belief that customers are really enjoying their week in the sun.”

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