- Winter bookings above expectations
- Pre-tax profit guidance raised
- Shares up 11% year-to-date
Shares in Jet2 (JET2:AIM) were up nearly 5% to £13.88 as the airline and package holiday provider said winter 2023/24 forward bookings were up by 17% for both flight-only and package holiday products for the year ending 31 March 2024.
The company also slightly raised its outlook for group pre-tax profit (before FX revaluation) for the financial year to between £510 million and £525 million from £480 million to £520 million previously.
CITY BREAKS POPULAR
The travel firm said the mix of higher-margin-per-passenger package holiday customers was ‘slightly ahead of last winter at approximately 60%, which is particularly pleasing given the resurgence of city breaks in this period’.
On-sale seat capacity for summer 2024 is currently 12.5% higher than summer 2023 at 17.2 million seats.
‘Forward bookings to date are encouraging, with average load factors 1.5ppts ahead of summer 2023 at the same point,’ the company added.
Jet2 also said it had taken delivery of five new CFM powered A321neo aircraft from Airbus in line with its agreed delivery schedule, with a further six aircraft due to arrive before the end of full year 2025.
EXPERT VIEW
Russ Mould, investment director at AJ Bell, said: ‘Jet2 is still seeing evidence of people prioritising spend on travel as they find it hard to give up on a week in the sun.
‘Where Jet2 has an advantage is in its formidable reputation for customer service. If you are having to spend more money on your holiday you want to be even more confident you are going to be looked after both on your way to the destination and when you get there.
‘Jet2 demonstrated good corporate behaviour during the pandemic – refunding deposits in a timely fashion and being proactive to cancel flights and holidays when they knew they couldn’t be fulfilled. It is reaping the rewards now and this affords the company an element of pricing power. Strong demand for higher margin package holiday bookings is a useful trend for the company.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell.
