Jet2 revenue soars 730% to £3.5bn in H1 after Covid

Leeds-based Jet2 plc said on Thursday it is presently on track “to exceed current average market expectations for group profit before FX revaluation and taxation for the year ending 31 March 2023.”

The guidance from Jet2 came as it announced results for the half year ended September 30, 2022, showing that its profit before foreign exchange revaluation and taxation increased to £505 million compared to a loss of £195.1 million a year prior, which was also 44% ahead of 2019 pre-Covid performance.

First-half revenue increased 730% to £3.567 billion, profit before taxation rose 319% to £450.7 million, and interim dividend will be 3p per share.

Jet2 shares rose about 3%.

Jet2 executive chairman Philip Meeson wrote: “Our Leisure Travel business has continued its encouraging recovery following the reopening of international travel in early 2022.

“Strong customer demand, in particular for package holidays, plus a robust pricing environment and considered cost control, have underpinned a substantially improved financial performance compared to recent Covid impacted summer seasons, but also against pre-Covid Summer 2019.

“The business made considerable investment well ahead of Summer 2022, retaining over 8,000 loyal colleagues throughout the pandemic and significantly topping up the Coronavirus Job Retention Scheme funding on a sliding scale basis up to 100% of salary for the lowest paid, recruiting and training seasonal colleagues in good time, making substantial marketing investments, plus early and meaningful salary increases for all colleagues.

“This left us very well prepared for our summer operation and also enabled to earn the accolade of being the only UK airline not to cancel a flight during July and August 2022, according to leading travel intelligence company, OAG.

“For the reporting period, seat capacity increased 14% against Summer 2019 and buoyant customer demand resulted in the business achieving an average load factor of 90.7% (2019: 93.1%), with package holiday customers displaying a materially higher mix of the total departing passengers at 65.9%, up 13.1ppts against Summer 2019 (2019: 52.8%).

“Despite our colleagues working incredibly hard and consistently going the extra mile to take our customers on their long-awaited holidays, unfortunately some customers still faced frustrating delays as our operations were directly impacted by the broader disruption seen across the aviation sector and its supply chains as was widely reported in the media.

“Regrettably, this resulted in Jet2 incurring delay, compensation and customer expenses reimbursement costs in excess of £50.0m under UK (EU) Regulation 261/2004 (“EU261/2004”) which was materially higher than in Summer 2019.

“In addition, our inflight retail financial performance was weaker than expected, due to product supply chain issues early in the summer season, plus poor onboard product availability caused by resource constraints at our third party inflight retail provider …”

In his outlook, Meeson added: “With Winter 2022/23 bookings encouraging and pricing remaining robust, but recognising that the important post-Christmas booking period is still to come, we are presently on track to exceed current average market expectations for Group profit before FX revaluation and taxation for the year ending 31 March 2023.

“Looking ahead, current seat capacity for Summer 2023 is approximately 5% higher than Summer 2022 (and approximately 20% higher than Summer 2019) with bookings at this very early stage encouraging, average load factors broadly in line with Summer 2019 at the same point and pricing strong.

“However, the group faces input cost pressures including fuel, carbon, a strengthened US dollar and wage increases, plus investment to ensure our colleagues can thrive and have a balanced lifestyle, further underpinning our operational resilience.

“This leads us to conclude that margins may come under some pressure, but encouragingly the strength of our recovery post Covid underlines our belief that customers truly cherish their weeks away in the sun and want to be properly looked after throughout their holiday experience.”