- Profit for 12 months to 31 March to beat estimates
- Planes fuller and package holidays more popular since pandemic
- Shares up more than 80% from mid-October lows
Budget airline and package holiday outfit Jet2 (JET2:AIM) is the latest name in the sector to impress as evidence of resilient demand for air travel continues to come through.
The company said it would beat market expectations for the March 2023 financial year, with pre-tax profits of £370-£385 million compared with the £317 million penciled in by analysts. The company added that on-sale seat capacity for summer 2023 is 6.6% higher than the summer 2022 season at 15.2 million seats and forward bookings are ‘encouraging’.
Load factors (how many seats are filled) are above pre-pandemic levels with pricing and margins ‘significantly’ higher. The company is also seeing a positive mix with 60% of its business coming from package holiday customers - up 16 percentage points on the position pre-Covid.
CONFIDENT IN FUTURE DEMAND
The company noted input cost pressures from fuel, a stronger US dollar and higher wages but added: ‘We remain confident that with our customer focused approach and right product for these tougher times, our customers will continue to be keen to travel with us from our rainy island to the sun spots of the Mediterranean, the Canary Islands and to European leisure cities.’
The shares managed modest gains this morning, up 3% to £12.13, building on a very strong run for the share price in recent months.
AJ Bell investment director Russ Mould commented: ‘Where Jet2 deserves credit is in the way it has treated customers over the last 12 months - not cutting flights at the last minute, doing its best to look after travelers and taking on board extra costs itself.
‘This should help make it a trusted brand in the travel space and one people return to again and again. While volatile costs and economic pressures could lead to turbulence in the short term, Jet2 has done a good job of setting itself on an upwards flight path for the long term.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Tom Sieber) and the editor (Ian Conway) own shares in AJ Bell.
