The biggest tour operators in the UK are confident in their long-term finances despite the hits they have taken to their balance sheets over the course of Covid-19.
Speaking at Travel Weekly’s Future of Travel conference, Jet2holidays chief executive Steve Heapy said Jet2 Plc has £2 billion in cash, of which “£1.5 billion is our own”, following two equity raises and issuing a convertible bond.
Heapy said the cash situation “means we are in a very good position financially”, adding: “We are financed from a position of strength.
“As a result of that we were able to place our new aircraft order of up to 60 aircraft worth £8.1 billion before discounts.”
Asked about future trading, Heapy said: “We are very confident.”
Tui’s UK and northern Europe managing director, Andrew Flintham, explained how Hanover-headquartered Tui had taken a €4.8 billion loan from the German state.
“That will all get paid back,” he said. “We were all probably heading for record years in the pe-pandemic times.”
Flintham noted “some changes in structure” due to the “huge number of assets Tui owns”, including aircraft, cruise ships and hotels. “We have moved to a model that’s less asset intensive,” he said.
Looking forward, Flintham said: “The travel industry generates cash at a pretty impressive rate when customers come back.”
Garry Wilson, chief executive of easyJet holidays, explained how the operator only officially relaunched in October 2019 but noted that the easyJet group’s debt had risen from £300 million to £2 billion over Covid. The carrier set out plans to raise £1.2 billion last week.
Noting the opportunities in the aviation sector, especially when take-off and landing slot protection schemes expire, he said the level of debt is “a balance between addressing the balance sheet and looking for the opportunities to come.
“When [the slot protection schemes] go, a lot of the legacy airlines will retract.”
Wilson added: “There are opportunities that present themselves and we want to be in a position to take up those opportunities when they come.”