Jet2 remains on course to beat annual profit forecasts despite suffering £13 million of costs due to Rhodes wildfires and last week’s UK air traffic control failure.
The airline and tour operating group group said in an annual meeting statement that it was on track to achieve a pre-tax profit in the range of £480 million-£520 million in the year to March 31, 2024.
The projection was “based on current visibility and having absorbed approximately £13 million of cost and lost margin from the Rhodes wildfires and the recent Nats air traffic control failure”.
The company revealed a small reduction in summer 2023 capacity as a result of the wildfires in Rhodes, but the level of 15.26 million seats was still 7.3% higher than last year.
The company highlighted its ‘customer first’ proposition which was “fully demonstrated both during, and after, the significant disruption caused by the Rhodes and Nats incidents as our UK operational and head office support teams, combined with our overseas teams at destination airports and in resort, once again proved a real differentiator”.
Jet2 added: “The months of July and August experienced strong late booking momentum with September currently showing a similar trend and average load factors now 0.5 percentage points behind summer 2022 at the same point.
“Pleasingly, the mix of higher margin package holiday customers represents 71.7% of total departing passengers at present and is 4.8 percentage points higher than summer 2022.”
The group described winter 2023-24 forward bookings as “encouraging” with average load factors 0.3 percentage points ahead of last winter, against a 20.4% capacity increase to 4.47 million seats, with a higher package holiday mix.
“For both seasons, average pricing to date for both package holidays and flight-only products has remained robust,” Jet2 added.
“Although there is still some way to go in the leisure travel winter booking cycle, we are on track to exceed current market expectations for group profit before foreign exchange revaluations and taxation for the year ending 31 March 2024, with the outcome presently expected to be in the range of £480m to £520m.
“This guidance remains dependent on avoiding any material extraneous events in the balance of the year.”
Summer 2024 is already on sale with growth in seat capacity of about 11% and average load factors “at this very early stage” slightly ahead of this summer at the same point.
“Looking forward, we continue to believe that package holidays are the right product for price conscious customers and our ability to offer a wide choice of quality product, together with truly variable duration holidays, enables them to conveniently tailor their holiday plans to suit their individual budgets,” Jet2 added.
“For the long term our strategy remains consistent – to be the UK’s leading and best leisure travel business with ‘People, Service, Profits’ serving as our guiding principles.
A further trading update is to be delivered alongside interim financial results on November 23.