Jet2 plc has hailed the rebound in consumer confidence as it reported a “significantly improved” annual financial result, exceeding its pre-pandemic performance.
Group operating profit for the year ended 31 March 2023 was £394 million, compared to a loss in 2022 of £323.9 million – and a 34% increase on 2020 (£293 million).
Chairman Philip Meeson has also announced he is stepping down from his role.
In a statement, the group said: “The final results announcement today highlights the excellent trading performance for the year ended 31 March 2023 together with pleasing forward bookings.
More: Jet2 chairman Philip Meeson to step down from board
“A robust balance sheet with £2.6 billion of total cash and £1.1 billion of ‘own cash’ bodes well for future growth, underpinned by the recent fleet order for 98 fuel-efficient Airbus A321/A320neo aircraft with options to increase to 146 aircraft by 2035.”
The average price of a Jet2holidays package holiday increased by 10% to £761 (2022: £689) reflecting changes in destination mix and favourable pricing driven by the consistently robust consumer demand.
Meeson said: “Despite the group facing various input cost pressures such as fuel, carbon taxes, a strengthened US dollar and wage increases, as well as investment to support the well-being and work-life balance of our colleagues, pricing to date for both our package holidays and flight-only products has been robust and consequently margins per booked passenger satisfactory.
“Looking forward, although we continue to believe that the end-to-end package holiday is a resilient and popular product, particularly during difficult economic times and our ability to offer truly variable duration holidays enables our customers to tailor their holiday plans to suit their individual budgets, we are cognisant of how quickly the macro-economic environment is evolving and how this may affect consumers’ future spending.
“On that basis, and with the peak summer months of July, August and September not yet complete plus the majority of winter 2023-2024 seat capacity still to sell, it remains premature as is always the case at this time of year, to provide definitive guidance as to group profitability for the financial year ending 31 March 2024.”
The average flight-only ticket yield per passenger sector was £100.28, 48% higher year on year, because of changes in the mix of destinations flown, notably an increase to those in the eastern Mediterranean, combined with strong consumer demand meaning fewer promotional offers were required.
Julie Palmer, partner at Begbies Traynor, said: “Jet2’s results are proof that Britons love a holiday with sales bouncing back far higher than pre-pandemic levels despite the last summer’s travel chaos as airports struggled to meet demand having cut back when Covid grounded flights.
“Tougher times for consumers didn’t dent demand and Jet2 believes that well priced and flexible breaks will remain popular as customers seek better value, a sector in which the company will benefit as holidaymakers increasingly turn to the package deals it offers.
“The traditional two weeks in the sun could become 10 days or a week as consumers look to trim costs, a trend which Jet2 is ready to capitalise on.
“At the height of the pandemic Jet2 took the tough decision to retain 8,000 staff, hoping to benefit when travel restrictions lifted, meaning it was better positioned than many to weather last year’s airport woes.
“Despite this, the company still took a £50 million hit in compensation payments from delays caused by customers getting held up in security queues, bags failing to arrive and ground handlers who weren’t so well prepared being overwhelmed by demand.
“The focus is now on whether this summer will see a repeat of last year’s troubles, with demand already close to last year’s levels just as Jet2 faces higher costs including rising wages, more expensive fuel and green taxes.
“Jet2 looks to have done what it can to prevent a repeat of last summer’s airport breakdowns – but its fate could be in the hands of others.”
Ruth Griffin, retail and leisure partner at law firm, Gowling WLG, added:“Jet2 is rising to new heights as consumer demand has firmly returned. The leisure travel company has successfully navigated through a difficult period for the sector which has seen widespread disruption.
“Having invested in its operations to cope with the flood of holidaymakers taking advantage of normalised travel, Jet2 has stayed in pole position.
“Of course, the company faces oncoming challenges from continued rising fuel and staff costs, as well as the pound falling in value, but is well positioned to manage this with strong bookings for the summer.
“It has also proven its reliability, having been the only UK airline to not cancel a flight in July and August 2022.
“Shareholders will be hopeful the demand from passengers persists. Despite the cost of living crisis, the trend for consumers to prioritise a holiday over other expenditures continues in earnest – and aids further recovery in the travel sector as a whole.”