Jet2 set for bumper profits as Brits opt for better weather and warmer seas
Jet2 is set to report profits ahead of expectations in its full year results next week, as the leisure travel company eyes a critical summer period ahead.
The group now expects pre-tax profits well above previous analysts’ estimates, of up to nearly £400m, well ahead of initial predictions of £377m.
It comes amid a rise in demand for its international offerings and a stronger than expected winter season.
The full-year results come following a booming few months for Jet2, which has thrived as post-pandemic travel mania, despite cost-of-living concerns, has seen airlines and tour operators rake in bumper profits.
It has promised a deeper dive into its outlook for summer in Thursday’s announcement.
Peel Hunt analysts said that “robust forward bookings and pricing” were encouraging, “with customers sacrificing other forms of expenditure to fund holidays.”
In February, the firms’ holiday segment, Jet2holidays, overtook major rival TUI to become the UK’s biggest tour operator for the first time, with 5.9 million people buying its package holidays.
In April, Jet2 hiked its pre-tax profit expectations from £387m to £392m.
“We continue to believe that despite price increases… international holidays to Jet2 beach destinations offer better value than similar domestic UK holidays, with a much higher chance of better weather and cleaner, as well as warmer, seas,” Peel Hunt analysts said.
“Jet2 has an extremely strong balance sheet… and has now achieved its ambition to become the market leading tour operator, which should deliver further scale benefits.”
The last few months have also coincided with a dip in fuel costs, which had previously hampered airliners profits and recovery.
Jet2 had previously warned of high input costs and cost pressures, including fuel, carbon, wage increases and investment and this could still dent margins and hamper demand – although analysts believe that high demand will “more than offset cost pressures.”