Jet2 cautious on input cost pressure but lifts yearly outlook

Jet2 PLC on Thursday said it is mindful of cost pressure going forward but lifted guidance for its recently-ended financial year on strong sales.

For the year ended March 31, the Leeds, England-based travel company now expects to report group pretax profit, before foreign exchange revaluation, between £387 million and £392 million.

The new guidance represents an uplift from already revised expectations. In January, Jet2 set its financial 2023 guidance between £370 million and £385 million, above market estimates of £317 million.

The company did note, however, the impact of input cost pressures, including fuel, carbon taxes, a strengthened US dollar and wage increases.

To counteract this, Jet2 said it invested well ahead of the summer season to ensure adequate, fully trained resources to operate ‘with our normal high standards of customer care’.

The firm has also taken control of handling operations at a further two of its UK bases - Bristol and Newcastle - meaning it can now self-handle at seven of its 10 UK bases and is not reliant on third parties.

Sale seat capacity for this summer is currently 7.2% higher than the last, at 15.3 million seats. Jet2 said forward bookings to date remain encouraging, with the mix of package holiday customers representing just over 75% of total departing passengers.

The company said that while it was pleased with its current position, it was too early to provide definitive profit guidance for the new financial year due to the threat of air traffic control disruption in Europe. It noted it still has the majority of the winter 2023/2024 season to sell.

Total cash at March 31 was £2.62 billion, with an ’own cash’ balance of £1.12 billion.

Jet2 will announce results for the year ended March 31, 2023 on July 6.

Jet2 shares were trading 0.2% lower at 1,322.00 pence each in London on Thursday morning.

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