UK leisure carrier Jet2 Plc said full-year earnings are set to exceed analyst consensus as demand for its flights and package holidays endures through an economic slump.
While margins will come under pressure from wage increases and the stronger dollar, winter bookings are encouraging and air fares remain robust, Leeds-Bradford airport-based Jet2 said in a statement Thursday.
The third-largest UK airline by passenger numbers, Jet2 is establishing itself as a more significant player in European aviation as demand rebounds from the coronavirus crisis. The company will offer 20% more capacity next summer than in 2019, and 5% more than in the peak season this year, betting that tighter household spending will favor its cheaper flights and all-inclusive holidays.
“The strength of our recovery post-Covid underlines our belief that customers truly cherish their weeks away in the sun and want to be properly looked after,” Executive Chairman Philip Meeson said in the release, adding that early bookings for next summer suggest occupancy levels in line with 2019.
Jet2 posted a profit of £505 million ($610 million) in the fiscal first half through Sept. 30, rebounding from a £195 million loss last year. The figure was also also 44% ahead of the pre-pandemic performance.
Jet2 rose rose as much as 4.5% to 932 pence in London, reducing the loss this year to 17%.
Two-thirds of customers traveled on higher-margin package holidays during the period, compared with just over half in summer 2019. Jet2 said its variable-duration holidays and flexible options should ensure a high level of continued travel even as disposable incomes contract.
Jet2 has backed up its growth bid with a spate of orders for Airbus SE A320neo jetliners after switching last year from Boeing Co. The latest deal for 35 planes worth $3.9 billion before discounts took the backlog to almost 100.
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