The boss of Jet2 and Jet2holiays today called for a “pragmatic and balanced” Brexit agreement to overcome economic uncertainty.
Philip Meeson, executive chairman of parent company Dart Group, warned of “significant cost pressures” going forward despite reporting soaring summer profits for the holidays and logistics business.
Total leisure travel revenue grew by 38% to £2.1 billion at an operating profit margin of 16%, resulting in operating profit growth of 69% to £347.8 million in the six months to September 30.
Dart Group saw overall pre-tax profits grow by 56% to £337.4 million.
However, increased losses are expected over the winter as the group continues to invest in additional aircraft, marketing and staff recruitment to support summer 2019 expansion.
Meeson described the past summer as being a “particularly strong season” as demand for both flights by Jet2.com and higher margin packages from Jet2holidays “proved buoyant throughout”.
Summer flight-only passenger numbers rose by 24% to 4.38 million while Jet2holidays saw carryings increase by 28% to 2.31 million, representing just half of overall flown customers.
Jet2.com flew a total of 8.93 million flight-only and package holiday passengers based on one-way sectors against 7.14 million in the same period last year, slightly ahead of a 24% capacity increase.
As a result, average load factors improved by 1.2 percentage points to 94.4%. This included “encouraging performances” from new operating bases at Stansted and Birmingham airport.
Average flight-only ticket yield per passenger sector at £88.02 was 17% higher compared to the “challenging market” in the prior year.
The average price of a Jet2holidays package holiday grew by 7% to £689 from £645 in summer 2017.
Non-ticket retail revenue per passenger grew by 9% to £23.83.
“This revenue stream, which is primarily discretionary in nature, continues to be optimised through our customer contact programme as we focus on continually developing our customer services,” Meeson said.
The Jet2 fleet expanded by 15 aircraft to 90 for summer 2018 with commensurate increases in pilots, engineers and cabin crew.
“We will continue to develop our holiday focused flying programme into summer 2019,” Meeson said.
He added: “With winter 2018-19 leisure travel bookings in line with expectations and notwithstanding the important post-Christmas booking period that is still to come, the board expects current market expectations for the year ending 31 March 2019 to be met.
“Looking ahead, significant cost pressures such as fuel and other operating charges, plus the necessary continued investment in our products and operations including that required to retain and attract colleagues, are emerging headwinds.
“This, coupled with the overall uncertain UK economic outlook particularly related to Brexit and how it may impact on consumer spending, means we remain unclear how demand will develop in the medium term.
“However, our strategy for the long term remains consistent – to grow both our flight-only and package holiday products.
“On the assumption that the UK government secures a pragmatic and balanced Brexit agreement with the EU, the outlook remains bright and we continue to have confidence in the resilience of both our leisure travel and distribution and logistics businesses.”
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