Jet2 plc, the Leisure Travel group, reported that it had entered into an agreement with Airbus for up to 75 new A321 neo aircraft, 60 of which are now firm orders. The airline/holiday company stated that the new aircraft were required to service the future anticipated growth of it leisure travel business and to refresh the existing aircraft fleet.
The new agreement with Airbus includes the purchase of 51 new A321 neo aircraft, with Jet2 exercising nine of its associated purchase rights to take the firm ordered total to 60 aircraft, with agreed flexibility to extend the order up to 75 aircraft. The firm ordered aircraft are due for delivery between 2023 and 2029, and at list price represented a total value of approximately $8.1bn, with a total transaction value for up to 75 aircraft of approximately $10.1bn, although this does not include “negotiated significant discounts from the list price”.
Jet2 said that it will “retain flexibility” in determining the most favourable method of financing the aircraft, which it expects will be through “a combination of internal resources and debt”.
Jet2 has reported a reduced of 4% in its group operating to £323.9m (2021: £336.1m) and the company’s group loss before foreign exchange revaluation and taxation increased by 1% to £376.2m (2021: £373.8m).
Jet2’s overall liquidity improved significantly with total cash balances (including money market deposits) at the year-end of £2,228.5m (2021: £1,379.0m), an increase of 62%. Own Cash which excludes customer deposits increased by 2% to £1,083.8m (2021: £1,061.7m).
Although seat capacity increased to 7.01m (2021: 2.00m), and average load factor increased to 69.2% (2021: 66.0%), Jet2 noted that “fragile consumer confidence arising from the three-weekly UK Government "traffic light" reviews during Summer 21, meant customer bookings were significantly closer to departure than normal, leading to a reduction in average flight-only ticket yield per passenger sector of 29% year on year”.
Jet2.com flew a total of 4.85m single sector passengers, an increase of 267% (2021: 1.32m). Jet2holidays package holiday customers represented 51% (2021: 58%) of the overall mix of flown passengers at 1.29m customers (2021: 0.37m), an increase of 249%.
Jet2 highlights in its results that although the company had invested “well ahead of the Summer 22 season to ensure we had adequate resources to be able to operate efficiently, we have been directly impacted by the broader disruption seen across the aviation sector and its supply chains”. Jet2 notes that “many suppliers have been woefully ill-prepared and poorly resourced for the volume of customers they could reasonably expect, inexcusable, bearing in mind our flights have been on sale for many months and our load factors are quite normal”.
As a result, Jet2 stated that its group performance for the financial year ending 31 March 2023 “very much depends on how quickly the broader aviation sector returns to some level of stability, as well as strength of bookings for the remainder of Summer and the second half of the financial year, a period for which we still have limited visibility”.
To reward and incentive employees to stay, Jet2 has also awarded all staff a total pay increase of 8% with a further £1k to be paid at the end of Summer 22.