Jet2 reports surge in summer half-year profits

Revenue for the period was up 24% year-on-year

Jet2 saw pre-tax profits surge by 47% to £660.5 million in the half year to September 30.

This came despite a £14 million hit from the broader disruption caused by the Nats air traffic control failure, Rhodes wildfires and flooding in Skiathos which collectively “directly impacted” operations. 

Revenue for the period was up 24% year-on-year to £4.4 billion to deliver a 19% rise in operating profit to £617 million.

The performance covering the summer peak has set the UK’s largest tour operating group on course to achieve annual profits of between £480 million and £520 million.

The company confirmed a 12% hike in capacity for summer 2024 to 17.19 million seats, with early stage bookings described as “encouraging” with load factors two percentage points ahead of this summer at the same point. 

This follows 7% more capacity added for this summer to 13.2 million seats and a greater mix of higher margin package holiday carryings.

Flight-only net ticket yield per passenger sector at £124.09 was 18% higher than the comparable period while the average price of a Jet2holidays package holiday also increased 11% to £855.

Jet2 said: “Despite the challenging economic environment, the popularity, resilience and flexibility of our holiday products were reinforced, as we capitalised on sustained though later customer demand, in particular for our end-to-end package holidays, with pricing remaining robust.”

The group hailed its ability to embed “sufficient resilience” into its operations, including standby aircraft and crews, in-resort customer helpers, plus responsive ‘go teams’, to handle unforeseen events such as the wildfires in Rhodes, flooding in Skiatos, the technological systems failure at Nats, and a record number of air traffic control strikes across Europe. 

“This proactive approach meant we were able to act swiftly to commit the necessary resources to support our customers during these incidents with our colleagues responding admirably,” the company added. 

Looking forward, Jet2 said: “For the winter 2023-24 season, against a 21% increase in on sale seat capacity to 4.49 million, the higher margin per passenger package holiday mix of departing passengers is currently up by 2.6 percentage points. 

“Although winter bookings have been a little slower in recent weeks with average load factors currently 1.3 percentage points down on winter 2022-23 at the same point, average pricing to date remains robust.

“As is typical for the group, losses are to be expected in the second half of the financial year, as we continue to invest in additional aircraft; marketing to ensure we optimise our pre-summer 2024 forward booking position; retaining increasing numbers of colleagues through the winter months to ensure appropriate operational resilience ahead of next summer; and attracting new colleagues in readiness for further expansion of our exciting package holiday and flight-only offerings, including at our new base at Liverpool John Lennon airport where operations commence in late March 2024.

“We know that many of our customers prioritise their hard-earned holidays over other areas of discretionary spend, although we are mindful of the macro-economic environment and are also monitoring the current geo-political challenges and how these may impact future spending behaviour. 

“Therefore, whilst we will carry on investing in our industry-leading customer service proposition and operational resilience, we will continue to responsibly manage our costs to ensure we can maintain our customer offering of great value holidays and flights.”

Chief executive Steve Heapy said: “We are pleased to have delivered another strong financial performance during the first half of the financial year, despite the well-publicised external challenges faced. This clearly demonstrates that our end-to-end package holiday is a popular and resilient product and is the right product for price conscious customers. 

“Our customer first ethos runs deep throughout our company culture with ‘People, Service, Profits’ our guiding principles and our commitment to an innovative, value for money product and exceptional customer service is unwavering. 

“We are truly grateful to have such exceptional colleagues who are not only some of the best in their profession but are also highly motivated and incredibly proud to provide this level of service. 

“As a result, we remain confident that as a customer focused and much trusted holiday provider, our customers will continue to travel with us to the sun spots of the Mediterranean, the Canary Islands and to European leisure cities and that we can continue to deliver on our long-term strategy to be the UK’s leading and best leisure rtravel business.” 

A new hotel sustainability labelling scheme to customers and travel agents to select from a collection of certified sustainable hotels which meet Global Sustainable Tourism Council recognised standards is to be unveiled next month.

The group also intends to update its sustainability strategy during the first half of 2024.