Jet2 has projected a significant increase in its annual profit for 2023-24, attributing this growth to strong sales. The revised forecast marks a considerable improvement over the previous year, aligning with market expectations.
The company’s robust balance sheet, featuring a substantial cash reserve, supports its optimistic financial outlook. Jet2’s strategic initiatives, including increased seat capacity and operational readiness, further bolster its market position.
Jet2’s Impressive Profit Forecast
Jet2 has announced an anticipated increase in its 2023-24 annual profit, expecting a rise by a third compared to the previous year due to robust sales. The company foresees a pre-tax profit ranging between £515 million and £520 million, slightly adjusted from a prior estimate of between £510 million and £525 million.
Despite the upward forecast, Jet2 officials describe this increase as consistent with existing market expectations. The company reported a notably ‘very strong’ balance sheet, with a total cash reserve of £3.2 billion and a balance of £1.3 billion, excluding customer advance deposits.
Strong Summer Performance
Jet2’s summer 2024 seat capacity has seen a 12.3% increase, bringing the total to 17.1 million seats. The season is currently 55% sold, with average load factors slightly surpassing those of the previous summer by one percentage point.
Forward bookings for package holidays have risen by 13%, and demand from flight-only customers has also grown, exceeding 18%. The package holiday mix of total departing passengers stands at 74%, marginally below last year. Pricing is showing a ‘modest increase’ over the same period last year.
Operational Readiness for Summer 2024
Jet2 has indicated operational readiness for the summer 2024 season. The airline has secured the necessary number of aircraft to support its programme and a fully trained workforce to maintain its high customer service standards.
Over 90% of the fuel needed for this season and over 80% of the fuel for the full financial year are hedged, ensuring cost stability amidst uncertain geopolitical conditions. Recently added to the fleet are two new Airbus A321neo aircraft, with another four expected before the financial year’s end.
New Liverpool Base and Fleet Expansion
Flight operations have commenced from Jet2’s new Liverpool airport base with promising results. Forward bookings are encouraging, and feedback from customers has been positive, indicating a strong reception for the new base.
This expansion is complemented by the addition of two new Airbus A321neo aircraft since February, increasing the total number of such aircraft to seven. The group plans to further augment this fleet with four more by the end of the financial year.
Market Strategy and Future Projections
Jet2 remains cautious of the broader macro-economic and geopolitical landscapes, aware of how these can affect future consumer spending. With over 40% of the summer 2024 and most of the winter 2024-25 season sales yet to occur, the company is not yet ready to release a profitability guidance for FY25.
Jet2’s preliminary results for the year ending March 31 will be disclosed on July 11. These results will offer a more comprehensive outlook on the pivotal summer 2024 trading period, deemed crucial for the company’s performance.
Leadership’s Perspective
Chief Executive Steve Heapy has expressed satisfaction with the strong FY24 financial results, emphasizing the company’s resilience and the popularity of its offerings. He acknowledged the excellent customer service and reliable product delivery by Jet2 staff.
The Chief Executive highlighted Jet2’s role as a trusted holiday provider, stressing its commitment to maintaining high service standards for customers traveling from the UK to leisure destinations in the Mediterranean and Europe.
Pending Announcements
While Jet2 is pleased with its performance for FY24, the company remains vigilant about potential changes in the economical and geopolitical climates. Given these considerations, and with substantial portions of upcoming season sales still pending, guidance on future profitability is deferred until more data becomes available.
In conclusion, Jet2’s projected profit growth reflects its strategic agility and operational excellence. The company’s proactive measures ensure preparedness for future challenges, despite macroeconomic uncertainties.
As Jet2 continues to expand and enhance its offerings, its commitment to maintaining high customer service standards remains evident, ensuring its sustained success in the competitive travel industry.
