Jet2 upgrades annual profit guidance following strong summer performance

Package holiday provider Jet2 has raised its full-year earnings outlook thanks to solid levels of summer demand.

The group now expects to post a profit before tax and foreign exchange revaluations of between £480million and £520million for the 12 months ending March, compared to average analyst estimates of £466.5million.

It marks the third time this calendar year that the firm has upgraded its annual profit forecast amidst a sustained resurgence in overseas journeys following the end of Covid-related travel restrictions.

Upgrade: Package holiday provider Jet2 has raised its full-year earnings outlook

Jet2 said the ‘strong late booking momentum’ seen in July and August had continued into September, while the share of departing passengers booking higher-margin package holidays was up nearly five percentage points on summer last year.

Forward bookings for the upcoming winter season are also robust, with airline seat capacity up by approximately a fifth to 4.5 million.

Following the statement, Jet2 shares climbed by 8.7 per cent, or 89p, to £11.15 on early Thursday afternoon, although they remain somewhat below their pre-pandemic levels.

Russ Mould, investment director at AJ Bell, said the performance was ‘all the more impressive considering the disruption last month from wildfires in prime tourist locations including Greece and air traffic control issues.

The wildfires that recently devastated parts of Rhodes forced the company to axe all flights to the Greek island for a whole week in late July.

As a result of the catastrophe, Jet2’s summer holiday capacity declined marginally to 15.26 million air passenger seats.

Thousands of Jet2 airline passengers suffered delays and cancellations a month later when Britain’s air traffic control system experienced a technical glitch. Combined, the two events cost the firm around £13million.

Yet, Britons have displayed few signs of cutting back on foreign vacations even amidst the cost-of-living crisis and rising airline and hotel prices.

Mould added: ‘Holidays have become a lot more expensive over the past year, so there has been some nervousness that companies like Jet2 would find it harder going. So far, those fears look overblown.’

Jet2’s trading update comes two days after it appointed board member Robin Terrell as non-executive chairman to replace Philip Meeson.

A former RAF pilot, Meeson started Jet2 four decades ago after acquiring the aviation business Channel Express, which transported flowers between the UK mainland and the Channel Islands.

By the time he stood down, he had transformed the company into a popular airline and Britain’s biggest package holiday operator.

For the last financial year, Jet2 reported turnover surpassed £5billion while profits soared by 151 per cent from pre-pandemic levels to £290.8million.

This post first appeared on Dailymail.co.uk