Leeds-based Jet2 plc reported record passenger numbers, revenue and profit for the year ended March 31, 2025 — but the firm’s shares fell as much as 9% as analysts worried over a trend towards later bookings.
Jet2 reported a 12% increase in profit before tax to £593.2 million as revenue grew 15% to £7.173 billion and flown passenger numbers rose 12% to 19.77 million.
Total dividend rose to 16.5p per share for the year, up from 14.7p.
Jet2 shares are still up about 30% for the past year.
Jet2 CEO Steve Heapy wrote in his outlook: “Bookings for Summer 2025 continue to be made closer to departure, as previously announced, but it is clear that customers’ eagerness to get away from it all and enjoy a relaxing overseas holiday in the sun remains strong, provided pricing is attractive.
“We are currently trading in line with market expectations supported by our flexible and fully integrated business model which provides the group with the ability to balance average load factor, pricing and product mix, in order to maximise overall profitability.
“We are fully hedged for fuel and foreign exchange for the season and over 90% for the full financial year and our carbon emissions are also fully hedged, providing important cost certainty.
“We are satisfied with our progress for FY26 to date, although we remain mindful of the late booking profile which limits forward visibility and the evolving geo-political and economic landscapes.
“With the peak summer months of July, August and September not yet complete, plus the majority of Winter 2025/2026 seat capacity of 5.8m still to sell, it remains premature, as is always the case at this time of year, to provide definitive guidance as to group profitability for the financial year ending 31 March 2026.”
REACTION:
Julie Palmer, partner at Begbies Traynor: “The continued trend towards later bookings, combined with ongoing geopolitical risks and a fragile economic backdrop, could weigh on consumer sentiment over the crucial summer months.
“With that in mind and the bulk of peak season trading still to come, there’s little room for complacency.”
Daniel Coatsworth, Investment analyst, AJ Bell: “Jet2 may have announced a robust set of full-year results and unveiled a meaningful hike in its dividend but, in signaling some headwinds for the remainder of this year, it has prompted some turbulence in the share price.”
Richard Hunter, Head of Markets at interactive investor: “Jet2 has brushed off concerns from earlier this year, leaving its shares clear for takeoff once more.
“The group had previously warned that the cost of living crisis could affect bookings, while higher costs could hamper earnings. However, and has been the case with many of its rivals, it is becoming increasingly clear that many customers are ring-fencing family getaway expenditure in their household budgets, regardless of the economic backdrop.
“In addition, Jet2 has hailed what it describes as a year of record passenger numbers, revenue and profitability. Passenger numbers grew by 12% to 19.77 million, underpinned by a rise of 8% in package holidays and 18% in flight-only deals. Seat capacity was bolstered by 13% to 22.29 million to reflect the strong demand. As such, revenues spiked by 15% to £7.17 billion, leading to pre-tax profit of £593.2 million, an increase of 12% and ahead of the expected £579 million.
“This boost led to a 22% reduction of total debt and a net cash position of £2.02 billion, a 17% increase from the corresponding period. In turn, the dividend was increased although the projected yield of 0.9% remains pedestrian, while the previously announced £250 million share buyback programme is now 35% complete. The improved financial position has also enabled the purchase of seven new aircraft and continuing investment in its digital business.
“Contrary to popular belief, Jet2 is no minnow. It is the third largest airline in the UK behind British Airways and easyJet, ahead of TUI and Virgin Atlantic. The company has opted to remain on AIM rather than seeking a full listing, and its £3.8 billion market cap makes it the largest company on its chosen index. If it were to switch to a full listing, it would immediately become the third largest FTSE250 company and indeed currently has a larger value than the FTSE100’s Berkeley Group.
“Inevitably, the outlook is not all plain sailing but the company is aware of the potential challenges to come. Customers are increasingly leaving the booking of their holidays until the last moment, which impacts the group’s visibility of earnings. In addition, the peak months of July, August and September are largely yet to come, while the Winter season remains difficult to predict at the current moment in time.
“In addition, investing in airline shares generally has never been for the faint hearted. The ferocity of competition and economic pressure remain as potential headwinds, as do some of the other issues which have historically blighted the sector, such as virus outbreaks, industrial action, volcanic dust clouds and higher fuel costs. The pandemic then added another level of issues, while current macroeconomic and geopolitical concerns add to a potentially dangerous mix, underlying some of the potential hazards of investing in the airline sector.
“Even so, Jet2 has been on a tear, with the share price reaching a record level last month and above its pre-pandemic highs. The price has dipped slightly since in view of increasing tensions in, but not limited to, the Middle East and at the open today on some profit taking given the recent run.
“However, this has done little to upset the direction of travel, with the shares ahead by 38% over the last year, as compared to a gain of just 1% for the wider FTSE AIM 100, and by 126% over the last three years. It is not unusual for investors to have something of a soft spot for the airline sector despite its occasional travails, and the market consensus of these shares as a buy reflects that overriding optimism.”