Jet2’s chairman says the travel group’s performance for the current financial year depends on how quickly the aviation sector returns to “some level of stability” – as well as the strength of bookings.
He also warned that inflation and the uncertain economic outlook will put pressure on prices “in the medium term”.
Philip Meeson made his comments in the Jet2 annual report and accounts, saying the company was hit by the “broader disruption” across the aviation sector and its supply chains, despite having “invested well ahead of the summer season to ensure we had adequate resources”.
It meant Jet2 has been incurring additional costs to recover the “consequent disruption to its flying programme”.
“Consequently, group performance for the financial year ending 31 March 2023 very much depends on how quickly the broader aviation sector returns to some level of stability, as well as strength of bookings for the remainder of summer and the second half of the financial year, a period for which we still have limited visibility,” he said.
“Despite the looming economic difficulties, for the long term we continue to believe that opportunities for us to grow share as a financially strong and trusted package holiday provider will only increase.”
Meeson said: “The end-to-end package holiday is a higher yielding, resilient and popular product in difficult economic times and the Mediterranean and Canary Islands are evergreen destinations where people absolutely want to go.
“The control of our own seat supply and our frequency of flying allow us to offer truly variable duration holidays, critical in allowing our customers the ability to flex their holiday arrangements to suit their individual budgets.
“And the all-inclusive package is a wonderful product for challenging economic times – all-in holiday cost certainty in a ‘one click’ purchase – perfect for those budget conscious customers.”
He said the leisure travel business has made a “satisfactory start” to the new financial year, with on-sale seat capacity for summer 22 about 14% higher than summer 2019.
“Overall demand for our leisure travel products has continued to strengthen, but with customers booking a little later than normal,” he commented.
“Additionally, package holiday bookings remain encouraging and are displaying a materially higher mix of the total up 13 percentage points and average load factors for the summer 22 season are currently only 1.4 percentage points behind summer 19 at the same point (against the 14% increase in seat capacity) whilst pricing remains robust.”