Travel group Jet2 has hailed record half year results but warned of a £25m impact per year thanks to tax measures in the recent Budget.
The Leeds Bradford Airport-based package holiday and flights business said operating profits had boomed in the six months to the end of September, up 14% to £701.5m. Revenue was up 15% in the same period to £5.08bn as bosses said customer were increasingly booking closer to the date of departure, with the last minute trend extending into the winter season too.
The trend led to more demand for cheap, flight-only bookings as passengers increased 18% to 4.11m. Total seat capacity increased 13% to 14.85m with flown passengers growing 11% to 13.34 million, giving an average load factor of 89.8%.
Package holiday pricing grew, with the average price of a holiday up 6% to £904, while flight-only ticket yield per passenger fell 1% to £130.81, though this was said to be offset by the strong late demand. Meanwhile non-ticket revenue per passenger increased 7% to £25.18 on the back of a 14% increase in inflight spend per passenger, thanks to improved in-flight product mix and stock availability from its new distribution facility.
Jet2 also presented a catalogue of rising costs from hotel costs up 21% to £2.13bn to landing, navigation and third-party handling costs up 17% to £367.5m. That came as travel agents commission climbed 9% to £133.9m and staff costs increased by 17% to £443.4m. The firm said that falling inflation and some improvement in the macroeconomic environment should help ease its overheads.
But bosses said losses are to be expected in the second half due to planned investment in additional aircraft, pre-summer 2025 marketing activity, purchasing of sustainable aviation fuel in line with Government mandates from January and recruitment to staff its new bases at Bournemouth and London Luton airports which launch in February and April respectively.
Steve Heapy, Jet2 plc chief executive officer, commented: “We are delighted to have delivered another record financial performance during the first half of the year. This result continues to demonstrate that our end-to-end package holidays and scheduled holiday flights, underpinned by our customer first approach, remain popular and resilient products. I would also like to thank our amazing colleagues who have helped deliver this result and who are ambassadors of our people, service, profits guiding principles and who continue to deliver award winning, sector leading customer service on a daily basis.
“Even in difficult economic times, the annual overseas holiday remains a highly valued and eagerly anticipated experience, often taking precedence over other discretionary spend. As a result, we are confident that our proven business model – anchored to delivering a fantastic customer service with a well-established, trusted holiday brand – offers customers a compelling value proposition. With our extensive product range, appealing flight times and truly variable duration holidays, customers have plenty of choice and flexibility to be able to tailor their holiday plans to meet their individual budgets.”
Jet2 board members approved an interim dividend of 4.4p per share, up from 4p in 2023, which will be paid on February 7, 2025.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
