Profits will be down this financial year at Jet2holidays and Jet2.com due to weaker demand for holidays, parent company Dart Group disclosed today.
Chairman Philip Meeson revealed that demand for leisure travel this summer to be “less buoyant than we would have hoped for and market pricing weak”.
He said: “This may be due to the weather, the World Cup, or because the financial recovery hasn’t yet taken hold in our home territory, the North of the UK.
“Unfortunately, therefore, in view of the current visibility we have of our remaining summer 2014 forward bookings, we now expect the current year operating profit outturn to be lower than previous market expectations.”
Jet2holidays’ operating profit soared by 122% to £14.4 million in the year to March as carryings doubled to 830,019.
Sister low cost carrier Jet2.com’s operating profit rose by 17% to £31.2 million as turnover grew by 16% to £643.1 million.
However, the carrier’s pre-tax profit dropped to £23.9 million from £29.3 million due to adjustments associated with the revaluation of US dollar cash balances and certain “ineffective” hedges, parent company Dart Group said.
The group said that around half of Jet2holidays are sold online, 20% from its Leeds-based call centre, which was moved back from South African, with the balance via high street and online travel agents.
“Sales through the travel agents remain an important channel and Jet2holidays can be booked through all major travel agent chains, key multiples, homeworker companies and independents in the North of the UK, each being proactively supported and nurtured,” the company said.
“Looking forward to the year ending 31 March, 2015, the business will continue to build brand and product awareness in its core markets, underpinned by strong and creative marketing and its focus on excellent customer service.
“Investment in TV advertising, intelligent use of social media and other online channels of communication, in addition to cross-selling between Jet2holidays and Jet2.com, will attract new customers and, importantly, generate valuable repeat business.”
The company used its annual results statement to confirm that it will seek “ultimate resolution” by appealing to the Supreme Court after losing an appeal against a county court ruling that it was liable to compensate passenger Ron Huzar for a 27-hour delay to a flight from Manchester to Malaga in October 2011.
The appeal may involve, instead or in addition, reference to the Court of Justice of the European Union, Dart Group said.
“Mr Huzar and his family were delayed on return from their holiday near Malaga in Spain, in October 2011. A replacement aircraft was positioned to Malaga to ensure our customers returned home as soon as possible.
“During the delay, Jet2.com fully met its duty of care obligations, providing food and hotel accommodation to all customers on the affected flight,” said Meeson.