Jet2 shares slump despite soaring financial performance, as boss says he will step aside
Leisure travel company Jet2 reported pre-tax profits of £390.8m, soaring 48 per cent from pre-pandemic levels, as it capitalised on an “enormous surge” in travel demand.
The Leeds-headquartered firm reported revenues surge 40 per cent higher then pre-Covid to just over £5bn in its full year results.,
The company stated that consumer confidence to travel had underpinned the “significantly improved financial performance.”
Philip Meeson, Jet2’s executive chairman – who announced he would step down in a seperate statement this morning, following a 40-year stint – said: “The conclusion of the Covid-19 pandemic and the unprecedented challenges faced by everyone during it, unleashed an enormous surge of pent-up demand for those experiences that consumers had truly missed in the preceding two years.”
The news of Meeson’s departure dented the morning’s positive results, prompting shares to slump 10 per cent – although analysts said this was unlikely to cause significant long-term problems amid such a strong outlook.
In the 12 months to March, the airline and operator flew a total of over 16 million passengers, an increase of 234 per cent on the covid-hit previous set of results.
Load factor – representing the proportion of available seats filled by passengers – was 90.5 per cent, up from 69.2 per cent on the previous year.
Today’s results come after an exceptional few months for Jet2, which has thrived as rising travel demand sees airlines and operators rake in huge profits.
In April, Jet2 hiked its full-year pre-tax profit expectations on the back of bumper bookings, prompting analysts to praise the group’s “goldilocks” business model, which they said would likely “drive further gains in years to come, whatever the path of the economy.”
In February, its holiday segment Jet2holidays became the UK’s largest tour operator as it flew past major rival TUI, increasing expected package holiday sales to 5.9 million.
The announcement today is just the latest evidence that British consumers are putting holidays at the forefront of spending, despite ongoing cost of living pressures.
Sophie Lund Yates, lead equity analyst at Hargreaves Lansdown said: “Jet2 has had a strong year, with revenue rising 40 per cent and profits coming along for the ride. Crucially, planes are more full on average and that makes margin growth an easier task.”
She added: “The executive Chairman is stepping down, which is a loss for Jet2 – he masterminded the strong growth from small cargo operation to bonified holiday brand. Ultimately though, this succession risk should be limited and it feels like a sensible time for a changing of the guard.”
The airline and operator is running its biggest summer programme this year, featuring 65 destinations.