Flight delay compensation pay-outs dent Jet2 profits

Flight delay compensation pay-outs dent Jet2 profits

Annual profits at the parent company of Jet2.com and Jet2holidays fell by 5% due to the cost of accounting for flight delay compensation.

Pre-tax profits at Dart Group for the year to March dropped to £40.2 million following a £17 million exceptional provision for possible passenger compensation for historical flight delays under EC regulation 261.

Group turnover for the business, which also includes logistics arm Fowler Welch, increased by 12% to £1.2 billion.

Leisure travel turnover grew by 14% to £1.1 billion from £967 million in the previous 12 months, reflecting an 8% increase in passenger sectors flown included a 20% increase in package holidaymakers.

The operator repatriated 700 holidaymakers in the wake of the Tunisia terrorist attack while the continuing tensions in Greece “have also demanded our attention and presence,” according to chairman Philip Meeson, who added:

“In this age of political and economic uncertainty more consumers are becoming aware of the wider benefits of a package holiday - where the tour operator has the responsibility for their wellbeing”.

He said: “Notwithstanding the tragedy in Tunisia and uncertainties in Greece, we are optimistic that group performance for the financial year to 31 March 2016 will exceed current market expectations.

“Looking further ahead, we note the considerable increase in capacity planned by several low cost airlines over the next few years.

“We believe the continued expansion of our package holiday product, together with the development of our directly contracted sun and city hotel portfolio differentiates our leisure travel business, giving us confidence for our continued profitable growth.”

Jet2holidays is now the third largest Atol-licensed package holiday operator while sister carrier Jet2.com expanded its fleet to 59 aircraft for this summer operating from seven UK airports.

The business has contracts with more than 2,400 hotels  and has almost 700 Leeds-based staff to support its growth in package holidays.

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