Jet2 expects a pre-tax loss of between £378 million-£383 million for past 12 months in the face of varying Covid travel restrictions.
The projection came in a trading update for the year to March 31 with the UK’s second largest travel group having total cash of £2.23 billion with an ‘own cash’ balance – excluding advance customer deposits – of £1.08 billion.
Passenger sectors flown and average load factors in October and November 2021 “increased markedly” following the dropping of the government traffic light system in early October.
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But the improving conditions were adversely affected in December and January as a result of the new Omicron Covid variant and the re-imposition of international travel restrictions, “both of which served to dampen customer confidence”.
The company added: “Pleasingly, progressive relaxation of UK travel restrictions in early 2022 – firstly, with the removal of pre-departure tests for vaccinated people travelling to the UK; and subsequently no longer having to take a post-arrival lateral flow test – resulted in bookings increasing materially with average load factors for February and March 2022 approaching seasonal norms as customer confidence in travelling internationally rallied.”
Capacity for summer 2022 is about 14% higher than pre-pandemic summer 2019 and bookings are “encouraging”.
Package holiday customers are also displaying a “materially higher” mix of the total, up 12 percentage points.
Average load factors for this summer are currently 2.5 percentage points behind summer 2019 at the same point, “with booking momentum accelerating, customer confidence continuing to grow and pricing robust, as customers treat themselves to their long anticipated and well-deserved holidays,” the company said.
Jet2 added: “We have worked hard to plan recovery for summer 2022, investing well ahead of the season to ensure we have adequate resources to operate with our normal levels of customer care.
“We also self-handle at many of our key bases and are therefore not reliant on third parties for these aspects of our operations.
“Additionally, we are currently 95% hedged for jet fuel for summer 2022 and approximately 65% hedged for winter 22-23 in line with our normal policy.”
Separately, the company revealed it exercised six purchase rights from a new Airbus A321neo aircraft order, meaning it now has 57 firm orders with the flexibility to extend up to a total of 75 aircraft.
“Jet2.com and Jet2holidays are well-recognised national brands with a loyal leisure travel customer following and we confidently believe that opportunities for financially strong, resilient and trusted operators will only increase,” the group added.
“With our strong ‘Own Cash’ balance as at 31 March 2022 of £1.08 billion, we are well placed to respond now that the leisure travel market has fully re-opened.”
The group will announce its preliminary annual results on July 7 and pledged to provide a fuller outlook for the “all-important” summer 2022 trading period.
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