Jet2 parent company Dart Group reported a 36% rise in pre-tax profits year on year to £177.5 million for the 12 months to March off the back of a 27% increase in Jet2holidays package sales.
Philip Meeson, Dart Group executive chairman, noted “less confidence” among consumers this summer meant prices had to be “enticing”, but said Jet2 would maintain its “strategy to grow” and meet the group’s existing profit forecasts.
He acknowledged the leisure travel business had been forced to discount prices since last summer “to achieve planned growth in customer volumes”.
Airline Jet2 carried almost 13 million passengers in the financial year with 3.17 million customers purchasing package holidays – 49% of total passengers – up from 2.5 million the previous year. Almost 6.5 million purchased flight only.
Total passenger numbers rose 24% year on year, ahead of the capacity increase of 23%.
The group’s leisure travel revenue rose 34% to £2.96 billion and group operating profit increased by £77 million or 61% year on year to £203 million.
Turnover at Dart’s distribution and logistics business was £179 million, 6% up on the previous year.
Meeson noted: “The travel industry is facing cost pressures in relation to fuel, carbon and other operating charges.”
But he said: “We have the strategy to grow our flight-only and package holiday business.”
The group noted summer 2018 had “proved particularly strong for our leisure travel business as demand for both our flight-only and higher margin package holiday product proved buoyant throughout”.
However, it said: “Favourable trading conditions gave way to a more uncertain consumer environment [last winter] which led to increased levels of price discounting to achieve the planned growth in customer volumes.”
At the same time, the cost of acquiring hotel rooms had increased “because of the stronger euro”, raising the average price of package holidays in the financial year to £669 – up from £633 the previous year.
Meeson reported: “Both our leisure travel and distribution and logistics businesses made satisfactory starts to the new financial year.
But he said: “It is clear from our forward booking trends that, generally, less confident consumers are booking later than last year and pricing for both our flight-only and package holiday products has to be continually enticing.”
He added: “The board remains optimistic that current market expectations for group profit for the year [to next March] will be met.”