Jet2 plc, the UK leisure travel group, has announced a half year net profit of £496.0 million – an increase over the previous half year period of 39% - and on the back of a 24% increase in revenue to £4.41bn.
Jet2 stated that compared to Summer 2022, seat capacity increased 7% and the business achieved an average load factor of 90.7% (2022: 90.7%) with higher margin per passenger. The company noted that its operations were “directly impacted by the broader disruption caused by the National Air Traffic Services (NATS) failure, Rhodes wildfires and flooding in Skiathos which resulted in approximately £14.0m of lost profitability”.
The group confirmed that it was currently on track to deliver Group profit before FX revaluation and taxation for the year ending 31 March 2024 of between £480m and £520m, in line with previous guidance. Jet2 also confirmed that current seat capacity for Summer 2024 at 17.19m seats is approximately 12% higher than Summer 2023.
Despite the challenging economic environment, Jet2 stated that the popularity, resilience and flexibility of holiday products were reinforced, as the company “capitalised on sustained though later customer demand, in particular for our end-to-end package holidays, with pricing remaining robust”.
The Group has exercised a further 12 aircraft options from its order with Airbus- taking its firm order tally to 110 A321/320neo aircraft, which could eventually extend up to 146 aircraft. Jet2 has taken delivery of the first five aircraft to date, with a further six due to arrive next calendar year
Jet2’s net financing income (excluding Net FX revaluation losses) increased by £59.0 million to £46.9 million, primarily due to £80.1 million of finance income following multiple bank interest rate increases, combined with higher average cash balances.
In the first half of the financial year, Jet2 generated cash from operating activities of £802.4 million, the increase primarily a result of improved EBITDA, together with higher finance income, offset by a larger run off of customer advances driven by volume growth.
Capital expenditure of £182.0 million represented balance payments for A321neo deliveries in the period, together with pre-delivery payments for future aircraft deliveries. The company has also continued to invest in the ongoing maintenance of existing aircraft fleet, ensuring its long-term reliability and performance. In early May 2023, Jet2.com took the opportunity to secure additional premises at Manchester Airport to build a second aircraft maintenance facility (next to its existing facility) which will support its anticipated fleet growth over the forthcoming decade.
Jet2’s overall liquidity improved significantly with a total cash balance (including money market deposits) at the half year end of £3,214.6m, an increase of 14%. The company’s cash position (excluding customer deposits) was £2,121.2m increased by 8%, while total debt decreased by 12% to £1,393.7m and net cash increased by 46% to £1,820.9m (2022: £1,245.8m).
Since the half year end, Jet2 also extended its sustainability-linked RCF by a further year through to 19 October 2027, on the same commercial terms with its four supportive relationship banks: Barclays, HSBC, Lloyds, and NatWest.