Jet2 suffered a greater level of losses in the half year to September 30 amid government travel traffic light restriction complexities.
However, Jet2 projected a return to “previously normal operations” next summer.
The UK’s second largest operator reported a pre-tax loss of £205.8 million for the summer six months against £119.3 million in the same period last year as operating expenses rose by 46% to £600 million.
This came despite revenue rising 43% year-on-year to almost £430 million as overall passenger numbers for the period increased by 55% to 1.53 million.
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Flying recommenced in late June following lockdown to Jersey and subsequently to the Balearic Islands and Madeira on July 1.
The programme was expanded to 37 destinations, or 55% of pre-Covid summer capacity, as the government allowed quarantine-free travel to amber list destinations for the fully vaccinated from mid-July, with operations also starting from Bristol in the month.
The company said: “Although seat capacity for the period increased by 86% to 2.68 million, average load factor fell to 57.3% with load factors to amber destinations, primarily popular high-volume leisure destinations, more than 20 percentage points lower than those for green destinations, as customers remained anxious they could quickly be changed to red, meaning enforced quarantine on return to the UK.”
Jet2 said that “fragile consumer confidence arising from the three-weekly UK government traffic light reviews undertaken throughout the period meant that customer bookings were significantly closer to departure than normal, leading to a reduction in average flight-only ticket yield per passenger sector of 25% year-on-year”.
The group warned for further losses over the winter period due to a “competitive pricing environment” plus “the necessary investment in our own operations in the remainder of this financial year in readiness for our flying programme expansion in the summer 2022 season”.
Current seat capacity for next summer is about 13% higher than pre-pandemic summer 2019.
Bookings for summer 2022, for which package holiday bookings are displaying “a materially higher mix” of the total, were described as encouraging, with average load factors ahead of summer 2019 at the same point.
Chairman Philip Meeson said: “Given these promising trends, we remain optimistic that in summer ‘22 we will experience a return to previously normal operations and customer volumes.”
He added: “Although first half losses are greater than last year, given the limited number of green destinations operated throughout the period and the fragile consumer confidence surrounding amber destinations, we have been satisfied with the positive financial contribution achieved, supported by our quick to market, flexible operating model.
“The dissolution of the green and amber lists from 4 October 2021 was particularly heartening, as were the changes to the UK government’s testing requirements for passengers returning to the UK.
“As a consequence, forward bookings for winter 21/22 have been markedly stronger and average load factors much improved.
“At present, on the assumption of a continued unhindered flying programme, we anticipate seat capacity for winter 21/22 will be approximately 11% less than winter 19/20.”
Meeson said: “The travel industry continues to be subject to a range of cost pressures most notably in relation to fuel and carbon costs. Additionally, we expect the competitive pricing environment being experienced for winter 21/22 to continue.
“We will also make necessary investment in our own operations in the remainder of this financial year, including the increasing cost of retaining and attracting colleagues in readiness for our flying programme expansion in the summer ‘22 season, plus marketing spend to drive customer bookings.
“As a result, and as is typical for the business, further losses are to be expected in the second half.
“Nonetheless, visibility as to the full year financial outturn remains limited and will very much depend on the continued rollout of vaccines, no further adverse Covid-19 developments and an uninterrupted winter 21/22 flying programme.”
“We continue to believe that opportunities for financially strong, resilient and trusted operators will only increase and with our own cash balance as at 14 November 2021 of £1,464 million, we are well placed to respond.
“And, given current booking visibility, we are confident that our Customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that Jet2.com and Jet2holidays will continue to have a thriving future, taking millions of UK holidaymakers annually, to the Mediterranean, the Canary Islands and to European leisure cities.”
More: Jet2 has winter under continuous review while summer 2022 outlook is ‘encouraging’