Leeds-based Dart Group, owner of Jet2.com and Jet2holidays, said in a trading update late on Wednesday that it has suspended its flying programme until at least May 1, 2020.
Dart Group also withdrew its previous, positive profit guidance issued on March 11 when it said it expected profit for the financial year ending March 31, 2020, to be significantly ahead of current market expectations.
Further, Dart said it is in “ongoing discussions with existing liquidity providers who recognise the strength of our business model.”
Dart Group shares closed down about 19% at around £3.80 as the firm’s current stock market value fell to around £697 million. Dart’s shares have fallen about 80% since February 18 when they traded around £19.30.
“Further to last week’s trading update made by the company on 11 March 2020, unprecedented and unforeseen levels of travel restrictions have been imposed by governments across Europe in response to the Covid-19 pandemic,” said Dart.
“This has resulted in Jet2.com having to suspend its flying programme until at least 1 May 2020.
“Over the past week we have conducted an extensive repatriation programme to bring our valued customers safely home, and we are proud that the company and all of our colleagues have gone the ‘extra mile’ to ensure that everyone has been looked after.
“Given the current situation and the wide range of intangibles with which we are now faced, including concern for our hotel partners with whom we have placed deposits to secure hotel rooms for the summer 2020 season, we now have reduced visibility on the financial implications for our company.
“In light of these rapidly changing exceptional events, plus the uncertainty around deposits recovery, the board has today decided to withdraw its previous profit guidance issued on 11 March 2020 and will provide a further update in relation to the FY20 profit outturn once circumstances become clearer.”
Dart added: “Although we have a strong and prudent balance sheet with a £1.5bn cash balance at 18 March 2020 and long-term structured debt in relation to aircraft financing, given the escalating situation we have accelerated actions to underpin the stability of our business and improve cash flows.
“This includes a reduced flying programme beyond 1 May 2020, freezing recruitment and discretionary spending and deferring all non-regulatory capital expenditure.
“In addition, we are in ongoing discussions with existing liquidity providers who recognise the strength of our business model.
“Whilst, we are encouraged by the UK Chancellor’s pledge ‘to do whatever it takes’, together with his announcement of a package of Government backed and guaranteed loans, we look forward to seeing further details of the proposed support for airlines and airports in due course.
“Further announcements will be made by the board as circumstances evolve.”