The owner of Jet2 and Jet2holidays has detailed the financial hit from the suspension of operations due to the Covid-19 crisis.

Dart Group revealed a £108.4 million exceptional charge over fuel hedges and a £8.1 million loss from foreign exchange due to “significantly lower” operations this summer.

The annual pre-tax profit for the 12 months to March 31 fell by 11% to £147.7 million from £166.5 million in the previous financial year.

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The mix of trade bookings as a proportion of total bookings grew by 4 percentage points to more than 28%, with an increase in associated commission levels paid.

The group has since moved to deal with the effects of Covid-19 by securing £300 million of government funding, a £171.7 million  share placing and the disposal of selling its distribution and logistics business Fowler Welch for £98 million.

The company has also been forced to make redundancies to match its re-sized flying programmes for this summer and winter 2020-21 and for flying in the financial year ending March 31, 2022.

Dart said: “The group still faces challenges as a result of the Covid-19 pandemic and therefore maintaining a healthy cash position remains our top priority.

“We have taken significant actions to improve our available liquidity over the last three months and will continue to do so, to ensure that we are best placed to respond swiftly as UK government travel restrictions are relaxed and customer confidence recovers.

“We remain confident that once normality returns, our customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that 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.

“The impact of Covid-19 means that both the flying and holiday programmes expected to be operated in the first half of the financial year ending 31 March 2021, are significantly lower than that on which the hedging programme for jet fuel and foreign currency was originally based.

“As a consequence, the group has recorded a net exceptional charge of £108.4 million relating to ineffectiveness on a proportion of its hedging instruments in the financial year ended 31 March 2020 results.”

Chairman Philip Meeson said: “The beginning of the new financial year has brought significant challenges for the entire leisure travel industry.

“The decisions and actions we have taken since have been guided by our commitment to maintain our responsible balance sheet management and carefully protect our cash balance, to enable the business to exit the Covid-19 period in a stable commercial position and to be able to capitalise on the upturn opportunity when it arrives.

“Group performance for the financial year ending 31 March 2021 is largely dependent on the level of flying permitted for the remainder of the summer 2020 period, as well as performance in the second half of the 2021 financial year, periods for which we currently still have limited visibility.

“Despite the uncertainty, our current monthly load factors for winter 2020/21 are satisfactory and summer 2021 bookings, which are showing a materially increased package holiday mix, are encouraging.

“Despite today’s uncertainties our business model remains unchanged – we will continue to dedicate significant resources to provide ‘real package holidays’ and deliver wonderful holiday experiences with priceless memories, ensuring that the customer remains at the centre of everything we do.

“We believe that we have the right customer-focused strategy to grow both our package holiday and flight-only products. Whilst flight-only remains very important, our higher margin package holiday business has tremendous further potential as our reputation for providing ‘package holidays you can trust’ strengthens.

“This gives us every confidence that with our focused approach, our customers will continue to be keen to travel with us from our rainy island to the sun spots of the Mediterranean, the Canary Islands and to European leisure cities and Jet2 will emerge from this crisis an even stronger company.”

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