Jet2 has raised its annual profit guidance on the back of heightened bookings and prices while cautioning on potential impacts on future consumer spending.
The UK’s largest tour operator expects group profit for the financial year ending in March to come in at between £510 million-£525 million against £480 million-£520 million in previous guidance.
Winter 2023-24 forward bookings have “performed well” against a 20.5% hike in capacity with passenger levels up 17% and average pricing for both flight-only and package holidays described as being “robust”.
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The mix of higher margin per passenger package holiday customers is “slightly ahead” of last winter at about 60%, “which is particularly pleasing given the resurgence of city breaks in this period,” the company said.
The increased profit guidance in a trading update came on the back of February and March 2024 bookings “displaying similar trends to recent months,” plus the benefit of an extra day’s flying in February and an earlier Easter.
Summer 2024 capacity is 12.5% higher than last year at 17.2 million seats, with forward bookings “encouraging”, with average load factors 1.5 percentage points ahead of last summer at the same stage.
Package holiday customers are up by 17% with the mix of total departing passengers at around 77% and in line with summer 2023 at the same point in the booking cycle, Jet2 said.
However, the company added: “Whilst pricing for summer 2024 across both our leisure travel products is currently showing an increase compared to the same period last year, we remain mindful of the current macro-economic and geo-political environments and how these could impact future consumer spending.
“Booking momentum is positive with hard-earned holidays remaining a priority for our customers, although as previously announced the group continues to see increases in input costs including from hotel accommodation and changes to the EU Carbon Emissions Trading Scheme, as well as planned investment to enhance our technology systems and in our much valued colleagues.”
Forward bookings for the operator’s 11th UK base at Liverpool John Lennon airport, where flights start on March 28, “have been pleasing, reinforcing our view of the meaningful opportunity across Liverpool, Merseyside and the wider region”.
Five new Airbus A321neos have been added to the fleet in line with an agreed delivery schedule, with a further six due to arrive before the end of the next financial year.
“These aircraft are already demonstrating their strategic value to the group in terms of operating economics, reduced emissions and customer experience,” Jet2 said.
“As always, we have invested well ahead of the summer season to ensure we have sufficient, fully trained resources to operate with our normal high standards of customer care.
“Our new retail operations centre is now fully operational and our customers are seeing tangible benefits from much improved on-board product availability.”
The group is due provide a further update in April and announce results for the year ending March 31 on July 11, including a fuller outlook for the “all-important” summer 2024 trading period.
Chief executive Steve Heapy said: “We are pleased with how the 2024 financial year is ending and are encouraged by early bookings for summer 2024.
“Whilst recognising that there are many demands on consumer discretionary incomes, we believe that our customers cherish their time away from our rainy island and want to be properly looked after throughout their holiday experience.
“We remain confident they will continue to travel with us to the sun spots of the Mediterranean, the Canary Islands and to European leisure cities.”