Jet2 interim profits rise but bookings slower in recent weeks

Jet2 said on Thursday that it was on track to deliver on its full-year guidance, as it posted a jump in interim profit and revenue thanks to good demand for its package holidays, but conceded that bookings had slowed in recent weeks.

In the half year to 30 September, operating profit rose 19% to £617m, while profit before foreign exchange revaluation and taxation was up 32% at £664.6m. Revenue increased 24% to £4.4bn.

In particular, the company highlighted solid demand for its end-to-end package holidays.

Jet2 said that against Summer 2022, seat capacity increased 7% and the average load factor - which measures how full a plane is - was 90.7%, in line with the prior year.

"Although bookings have been a little slower in recent weeks with average load factors currently 1.3ppts down on Winter 2022/23 at the same point, average pricing to date remains robust," it said.

"With over 40% of Winter bookings traditionally made during the January to March period, we currently remain on track to deliver group profit before FX revaluation and taxation for the year ending 31 March 2024 of between £480m and £520m, in line with our previous guidance. This remains dependent on no material extraneous events in the balance of the financial year."

At 0920 GMT, the shares were down 2.9% at 1,098.10p.

Russ Mould, investment director at AJ Bell, said: "There was evidence of the strong post-Covid rebound in overseas travel in package holiday firm Jet2’s latest results. Although there were also indications that this may be difficult to sustain with bookings having slowed in recent weeks.

"Notably, Jet2 has held firm on pricing but there has to be some risk the cost of jetting off for a break abroad is moving beyond the means of at least some hard-pressed households.

"Jet2 says it has a ‘wonderful product for challenging economic times’ but you imagine internally the company must be aware it has benefited from extreme pent-up demand in the wake of Covid, which meant people were so keen for a week in the sun they would prioritise it above almost anything else.

"An all-in package holiday, of which Jet2 is selling more and more, offers certainty on cost, but that doesn’t make it cheap.

"Where Jet2 does have credit in the bank is in how it deals with customers - notably being more straightforward and decisive than rivals during the period of pandemic disruption. The addition of new staff to ensure it has operational resilience shows that, while it wants to keep a tight rein on costs, it does so in a sensible way."