Jet2 makes £206m loss, warns of tough winter

Shares of Leeds-based Jet2 fell about 7% on Thursday after its results for the half year ended September 30, 2021, showed a loss before taxation of £205.8 million compared with a loss of £119.3 million for the same period a year earlier.

Revenue rose 43% to £429.6 million, but the company warned: “The competitive pricing environment being experienced for Winter 21/22, plus the necessary investment in our own operations in the remainder of this financial year in readiness for our flying programme expansion in the Summer 2022 season, means that, as is typical for the business, further losses are to be expected in the second half.”

Jet2 executive chairman Philip Meeson said: “The dissolution of the Green and Amber lists from 4 October 2021 was particularly heartening, as were the changes to the UK Government’s testing requirements for passengers returning to the UK.

“As a consequence, forward bookings for Winter 21/22 have been markedly stronger and average load factors much improved.

“At present, on the assumption of a continued unhindered flying programme, we anticipate seat capacity for Winter 21/22 will be approximately 11% less than Winter 19/20 …

The travel industry continues to be subject to a range of cost pressures most notably in relation to fuel and carbon costs.

“Additionally, we expect the competitive pricing environment being experienced for Winter 21/22 to continue.

“We will also make necessary investment in our own operations in the remainder of this financial year, including the increasing cost of retaining and attracting colleagues in readiness for our flying programme expansion in the Summer 22 season, plus marketing spend to drive customer bookings.

“As a result, and as is typical for the business, further losses are to be expected in the second half.

“Nonetheless, visibility as to the full year financial outturn remains limited and will very much depend on the continued rollout of vaccines, no further adverse Covid-19 developments and an uninterrupted Winter 21/22 flying programme.

“Current seat capacity for Summer 22 is approximately 13% higher than Summer 19 and we are on sale to all our popular Real Package Holidays leisure destinations.

“Bookings for Summer 22, for which package holiday bookings are displaying a materially higher mix of the total, are encouraging, with average load factors ahead of Summer 19 at the same point.

“Given these promising trends, we remain optimistic that in Summer 22 we will experience a return to previously normal operations and customer volumes.

“We continue to believe that opportunities for financially strong, resilient and trusted operators will only increase and with our Own Cash balance as at 14 November 2021 of £1,464.0m, we are well placed to respond.”

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