Ian Taylor reports after Jet2 raised its profit forecast and Tui hailed ‘stability’ in UK market
Tui’s first-quarter results and a trading update from Jet2 last week brought confirmation of the current strength of outbound demand.
Jet2’s update saw the company raise its profit forecast for the 12 months to the end of March off the back of strong trading. It noted a 20.5% increase in Jet2 capacity for this winter and reported bookings up 17% to the end of January with average prices “robust” and the proportion of higher-margin package customers “ahead of last winter” at 60% of sales.
The company said “similar trends” for February and March, plus an extra day’s flying on February 29 and the early Easter (Good Friday is March 29) had led it to “slightly raise our guidance for group profit” before tax and foreign exchange costs to between £510 million and £525 million, up from £480 million to £520 million.
Jet2.com’s current summer capacity of 17.2 million seats – meaning 8.6 million return flights – is 12.5% up on last year and the company reported its average load factor 1.5 percentage points ahead of last summer at the same point, with package holiday customers up 17 percentage points to 77% of the total.
It reported pricing “currently showing an increase” compared with the same period last year but added a cautionary note: “We remain mindful of the current macroeconomic and geopolitical environment and how these could impact future consumer spending.”
Conclusions about the strength of the UK market are more difficult to draw from Tui’s results as the group doesn’t break down the figures by country. Group-wide bookings were up 8% year on year for the current winter and summer seasons to February 4, with a 4% increase in average sales price for both seasons.
Tui also reported it had 700,000 more bookings than a year ago across winter and summer by early February, with chief executive Sebastian Ebel saying: “Demand for all key medium and short-haul destinations is up. There is a very strong landscape for tour operators.”
UK summer bookings were only 3% up year on year, but Ebel noted how “very strong” UK bookings were in the first weeks of last year and hailed the UK as “a very attractive, very stable market”, insisting: “The UK has had a very strong winter.”
Speaking at Tui’s annual general meeting, he said: “Our travel agencies and partner sales in the UK are showing very good growth.”
He also reported a recovery in bookings to Egypt this winter, saying the destination had “come back very strongly” after being hit by Israel’s war on Gaza.
Ebel reported Tui’s financial year to the end of September 2023 was “also successful in strengthening the balance sheet”, noting: “We were able to repay the coronavirus state aid in full.”
Tui reported no increase in its €4.4 billion in debt since the end of September – unusual for a tour operator in winter.