Jet2 believes package holidays for price conscious holidaymakers in “challenging economic times” will help drive future growth.
However, the company warned that margins may come under pressure in the short term.
The remarks are due to be made at the annual meeting of the UK’s second largest tour operating group today (Thursday).
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Executive chairman Philip Meeson will say in a statement to the AGM that Jet2’s leisure travel business continues to benefit from the “significant investment” made in preparation for the summer 2022 season, retaining more than 8,000 staff during the pandemic and substantially topping up the government’s Coronavirus Job Retention Scheme funding while recruiting and training seasonal colleagues in good time.
“It is this focus on the long term differentiation of the Jet2.com and Jet2holidays brands that has enabled our on sale seat capacity for the season to remain approximately 14% higher than summer 2019, with no cancellations made due to any Jet2 resource constraints,” Meeson will tell shareholders.
“Overall customer bookings, though a little later than normal, have remained consistently strong.”
Package holiday customers continue to represent “a materially higher mix” of the total departing passengers, up 13 percentage points, with average load factors only 1.4 percentage points behind summer 2019, while pricing remains “robust”.
“Pleasingly, the difficult return to normal operations experienced in early summer 2022 due to the lack of planning and investment by many airports and associated suppliers, has abated significantly,” according to Meeson.
He will add: “We are very confident that, package holidays are the right product for price conscious customers especially in challenging economic times, and this provides further opportunity for us to grow our customer base, though as previously announced, margins may come under some pressure in the short term.
“Our well proven dynamic booking systems enable us to flex our offer to match consumers’ changing demands and to deliver great value truly variable duration holidays. We also expect the growing package holidays mix to continue to benefit from our high trust ratings right across Which?, Trip Advisor, Trust Pilot and Skytrax.”
Winter 2022-23 forward bookings are “satisfactory” with average load factors matching those of winter 2019-20 at the same point, against a 2% seat capacity increase and with robust pricing.
Meeson will say: “With some way still to go in the leisure travel winter booking cycle, we are currently on track to achieve current market expectations for group profit before foreign exchange revaluations and taxation for the year ending 31 March 2023.
“We have never compromised on customer service and nor shall we in the future. It is the founding principle of what we do and we were delighted to welcome Jet2.com’s 100 millionth customer who travelled from Manchester airport to Fuerteventura a week ago.
“We very much look forward to providing our next 100 million customers with the high levels of service which our existing customers know they can rely upon and which new customers will be delighted to discover, all with the added comfort of a group which has emerged from the pandemic in sound financial health with a very strong own cash – excluding advance customer deposits – position.”
A further trading update is due to be provided with the release of interim results on November 24.
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