- Forecast earnings range lowered to £449-£496 million
- Reducing capacity for Winter 2025/6
- Year-to-date shares down 10%
Shares in Jet2 (JET:AIM) took a tumble in morning trading, falling more than 14% to £13.86 as the airline and package holidays provider warned of lower full year 2026 EBIT (earnings before interest and tax).
Ahead of its AGM the company said it is expecting EBIT in the range of £449 million to £496 million.
The company is blaming the lower forecast on a less certain consumer environment and the closer to departure booking trend.
Despite this, it reported summer 2025 sale seat capacity of 18.5 million seats up 8% compared to the same period last year (and consistent with its last update on 9 July) and it plans to maintain attractive pricing to ensure ‘our customers are able to get away from it all and enjoy a relaxing holiday’.
Steve Heapy CEO of Jet2 said: ‘Although we are currently operating in a difficult market, we have a proven business model, a loyal customer base, a flexible approach to capacity management and of course our multi award-winning customer service.
‘We believe that these factors provide the foundation for a solid financial result this year and for further profitable growth in the years to come.’
ANY 2025 SHARE PRICE GAINS WIPED OUT
Russ Mould, investment director at AJ Bell said: ‘Jet2 has once again bemoaned this situation [of late bookings], leaving it with cloudy rather than crystal clear earnings visibility. Management cannot keep their fingers crossed that sales will eventually come through; they need certainty given the expense in running a fleet of aircraft and a complex accommodation chain.
‘Guidance that full-year earnings will be at the lower end of market forecasts has wiped out Jet2’s share price gains so far this year. It’s a disappointing setback for the business and has dragged down shares in other airlines including EasyJet and Wizz Air.
‘Jet2 has a few levers it can pull in response. Seat capacity has been trimmed for the winter season, albeit still higher than last year. It is also making prices more attractive for holidaymakers to help shift the remaining holidays or plane seats still available. That could curb profit progression but help to keep the business ticking over.’
BALANCE SHEET STRENGTH HIGHLIGHTED
Despite share weakness Damian Brewer analyst at Canaccord Genuity is is sanguine about the situation: ‘We think Jet2 remains invested in quality and possesses excellent (customer-rated) product, high repeat custom, highly rated service; limited long-term fixed costs and strong flexibility; low risk of stranded capital; and balance sheet strength and minimal net debt.
‘We believe this positions Jet2 to grasp opportunities and to build stronger compounding profit returns for the future. In our view, Jet2’s balance sheet strength is critical here – and leaves it with options to exploit that few can match.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Tom Sieber) own shares in AJ Bell.
