On Wednesday, airline Jet2 plc released interim results, which show that although the revenue rose in the last half-year period, bookings have slowed in recent weeks.
Jet2 shares were down 4.48% at the time of writing on Thursday and were trading at 1,080.30 p.
A major contributor to higher revenue was increased prices. The average cost of a Jet2 package holidays increased by 11%.
The net ticket yield per passenger sector for flight-only services reached £124.09, marking an 18% rise from the previous year’s £105.00.
Operating profit rose 19% to £617 million.
The company further states that there were instances when their operational performance was directly affected by various disruptions, including the NATS failure, Rhodes wildfires, and Skiathos flooding, resulting in an approximate loss of £14.0 million in profitability.
According to Russ Mould from AJ Bell, “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”.
Mould also added that “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 total cash balance, which includes money market deposits, reached £3,214.6 million, marking a 14% increase from the previous year.
For the Winter 2023–24 season, despite a 21% rise in on-sale seat capacity to 4.49 million, the higher-margin per passenger package holiday mix for departing passengers has increased by 2.6 percentage points, the Jet2 report explains.
It further states that, while recent bookings have been slightly slower, average pricing remains strong.
The company’s CEO, Steve Heapy, stated that “we are pleased to have delivered another strong financial performance during the first half of the financial year, despite the well-publicised external challenges faced. This clearly demonstrates that our end-to-end package holiday is a popular and resilient product and is the right product for price-conscious customers.”
However, Russ Mould said on the topic that “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.”
Adding that, “An all-in package holiday, of which Jet2 is selling more and more, offers certainty on cost, but that doesn’t make it cheap”.
The Jet2 report further states that, looking ahead to summer 2024, the current seat capacity of 17.19 million seats is about 12% higher than summer 2023.