Leisure Demand Sees Jet2 Profits Take Off

DALLAS - Leeds Bradford (LBA)-based Jet2 (LS) has revealed that it has returned to profit for the first half of the 2022/23 financial year, thanks to booming demand as Covid restrictions were eased.

The low-cost leisure carrier posted pre-tax profits of £505 million (US$610.1 million), some 44% higher than in the same period in 2019. Net profit was £356 million (US$429.9 million), up from a loss of £164 million (US$198 million) last year.

Meanwhile, revenues increased to £3.58 billion (US$4.3 billion), up from £429 million (US$518.1 million) for the same period last year.

Leisure travel demand for its 'Jet2 Holidays' has helped boost the group's profits. Photo: Alberto Cucini/Airways.

"Encouraging Recovery"

Phillip Meeson, LS CEO, said, ”Our leisure travel business has continued its encouraging recovery following the reopening of international travel in early 2022. Strong customer demand, in particular for package holidays, plus a robust pricing environment and considered cost control, have underpinned a substantially improved financial performance compared to recent Covid impacted summer seasons, but also against pre-Covid summer 2019.”

Meeson went on to say the airline had encountered “a difficult return to normal operations.” LS had to pay over £50 million (US$60.4 million) in delay, compensation and passenger reimbursement costs. This was despite the airline managing to avoid large-scale cancellations due to staff shortages at many UK and European airports. Various supply chain issues also hit in-flight sales.

LS has wet-leased several Airbus A330s to support its busy summer schedule. Photo: Alberto Cucini/Airways.

Looking Ahead

The airline recently announced a firm order for a further 35 Airbus A320neo family airframes. This was on top of the 36 A321neos ordered in August 2021. It also has the option to increase the number of airframes to 71. At the time, LS said the deal was ‘to meet the future anticipated growth of its Leisure Travel business and to refresh its existing aircraft fleet.’

Looking ahead, Meeson said that forward bookings were “encouraging” and that average load factors were “broadly in line with summer 2019 at the same point and pricing strong.” However, he also warned that heightened costs associated with “fuel, carbon, a strengthened US dollar and wage increases” could put its profits margins under pressure.

Featured Image: LS is planning on retiring its long-serving Boeing 757s by 2026. Photo: Adrian Nowakowski/Airways.