Jet2 expects £385m loss, but winter bookings strong

Leeds-based Jet2 plc said on Tuesday it expects to report a loss before foreign exchange revaluation and taxation from continuing operations of between £375 million and £385 million for the financial year ended March 31, 2021, “as a result of the Covid-19 pandemic.”

However, Jet2 said it is encouraged by the volume of customer bookings for winter holidays.

Jet2 said it took “swift and decisive action” to raise close to £1 billion in liquidity “from a diversified range of funding sources” to mitigate the impact of the Covid-19 pandemic.

“In addition, the business undertook many actions internally to reduce cash burn and preserve cash,” said Jet2.

“As a result, our liquidity position is strong with the group’s cash position as at 31 March 2021 comprising unaudited total cash of £1,379m and “Own Cash” (excluding advance customer deposits) of £1,062m (2020: £520m), an increase of 104% on the prior year end.

“This was after promptly returning over £1.3bn of customers’ deposits for which we were commended by both the UK Civil Aviation Authority and Which?”

Looking ahead to its year ending March 31, 2022, Jet2 said: “The continuing successful rollout of vaccines in the UK and the increasing momentum in Europe are both encouraging.

“Additionally, on 9 April, we welcomed confirmation from the UK Government’s Global Travel Task Force that international travel remained on track to reopen in mid-May.

“However, we were disappointed at the lack of clarity contained in the Task Force’s report, in particular the as yet to be populated ‘traffic light’ framework for destinations, and full details and cost of the associated testing regime.

“This means the impact and duration of the proposed Covid-19 travel restrictions for Summer 21 remain difficult to determine and due to this continued uncertainty, in fairness to all our stakeholders and especially our customers, we took the difficult decision to extend the suspension of our flights and holidays from 17 May up to and including 23 June, by which time we are expecting more clarity.

“Both pre-pandemic and throughout the last 12 months, our airline, Jet2.com, has demonstrated a high level of operational flexibility by responding rapidly to evolving market conditions generating cash in doing so, and we retain that flexibility to react quickly as travel restrictions change.

“Unsurprisingly given the short-term uncertainty, customers are booking significantly closer to departure for Summer 21.

“However, we continue to be encouraged by the volume of customer bookings for both Winter 21/22 and for Summer 22, for which package holiday bookings are displaying a materially higher mix of the total.

“Based on this limited visibility, we are confident that once normality returns, our customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that Jet2.com and Jet2holidays will continue to have a thriving future, taking millions of UK holidaymakers annually, to the Mediterranean, the Canary Islands and to European Leisure Cities.”

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