REG - Jet2 PLC - Trading Update

Jet2Announcement

19/02/2025 07:00

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RNS Number : 5837X  Jet2 PLC  19 February 2025

19 February 2025

Jet2 plc ("the Group" or "the Company")

Trading Update

Year ending 31 March 2025 (FY25)

Winter 2024/25 on sale capacity at 5.1m seats is 14% higher than Winter
2023/24 with the closer to departure, later booking profile experienced during
Summer 2024 having continued. Season to date booked average load factor is
down by 2.2ppts, with the month of March and the later timing of Easter
year-on-year contributing 1.3ppts of this decrease. Overall pricing for the
season has remained competitive.

Assuming no material extraneous events in the remainder of the financial year,
and given the prevailing trends, the Board expects to report a Group profit
before foreign exchange revaluation and taxation for the year ending 31 March
2025 of between £560m and £570m, an 8% to 10% increase on the prior year.
This range excludes gains from asset disposals, including the ongoing sale of
our recently retired Boeing 757-200 fleet, details of which will be provided
in our April post-close trading update.

Year ending 31 March 2026 (FY26)

On sale capacity for Summer 2025 is currently 8.5% higher than Summer 2024 at
18.6m seats, with our new bases at Bournemouth and London Luton airports
contributing approximately 4% of this growth at over 0.7m seats.

To date we are continuing to see a later booking profile. For the combined
departure months of April, May and June, total forward bookings are up by
approximately 7% with overall average load factor for our existing bases
broadly flat. Bookings for our two new bases are encouraging, although the
average load factor at London Luton is materially lower than that of existing
bases due to it only going on sale when operations were announced in November
2024. For the same departure months, Package Holiday customers have increased
by 4%, while Flight-Only passengers have grown by 19%. Pricing remains keen
with our package holiday product displaying a modest average increase and
flight‐only slightly positive.

As always, we remain committed to investing for the long-term benefit of the
business and our two new operating bases at Bournemouth and London Luton
airports, in areas of the UK where Jet2 is currently underrepresented,
illustrate that commitment. We believe these bases will add considerable value
well into the future, but in the short-term, with the announcement of London
Luton coming after the start of the summer on-sale process, combined they are
expected to be modestly loss making in their first year of operation. In
addition, fully recognising that we require an energised, engaged and happy
workforce to continue to provide our award-winning, differentiated end-to-end
Customer First proposition, we recently awarded our Colleagues a 3% pay
increase effective from April 2025 in line with our People, Service, Profits
principles.

Separately, the Group continues to experience inflationary input cost
pressures exceeding the headline CPI rate, in particular in the large cost
areas of hotel accommodation, aircraft maintenance and general airport and
Eurocontrol charges. Helping to mitigate these headwinds in part, we are
approximately 85% hedged for Summer 2025 for both foreign exchange (USD and
Euro) and jet fuel and 100% hedged for calendar year 2025 carbon emissions
allowances, locking in a healthy proportion of cost certainty at beneficial
year-on-year rates.

Additionally, we expect to take delivery of a further 14 new owned and leased
CFM powered Airbus A321neo aircraft, increasing the A321neo fleet to 23 by the
end of Summer 2025. Unfortunately, a number of these aircraft will be delayed
from their agreed delivery dates and consequently we expect to incur
additional operational costs to cover aircraft gaps in the peak summer flying
programme. Nevertheless, we remain very pleased that the A321neo aircraft are
already demonstrating their strategic value in terms of operating economics,
reduced emissions and customer experience.

Like many businesses, we are facing other material cost increases imposed by
recent fiscal announcements and Government regulation. The largest of these is
the expected increase in wage costs driven by a combination of: increases to
the National Living Wage which ripples through to several pay levels as we
maintain appropriate wage differentials; plus the changes to both the Employer
National Insurance threshold and headline rate. As previously announced,
combined these will total approximately £25m of full year incremental costs.
In addition, the mandated increase to 2% of Sustainable Aviation Fuel (SAF) in
the aircraft fuel mix will result in over £20m of incremental costs, owing to
the significant price differential between SAF and conventional jet fuel.

Steve Heapy, Chief Executive Officer, commented, "We are very pleased with how
the 2025 financial year is ending and our expected 8% - 10% profit growth, and
given the limited forward visibility we are satisfied with early bookings for
Summer 2025. We continue to believe that our Customers cherish their time away
from our Rainy Island and want to be properly looked after throughout their
holiday experience and we will continue to invest in our business to meet
these expectations. However, we also recognise the current macro-economic
conditions and the many demands placed on consumer discretionary incomes,
which combined with the later booking profile and cost headwinds detailed, may
mean profit margins in the year ahead come under some pressure. Nevertheless,
our Customer First focus remains unwavering and as a much trusted holiday
provider with an end-to-end customer care approach, we remain confident
customers will continue to travel with us to the sun spots of the
Mediterranean, the Canary Islands and to European Leisure Cities for many
years to come."

The Group will provide a further update in April 2025 and will announce
its Preliminary Results for the year ending 31 March 2025 on 9 July 2025,
which will include a fuller outlook for the all-important Summer 2025 trading
period.

 

Certain information contained in this announcement would have been deemed
inside information as stipulated under the UK version of the EU Market Abuse
Regulation (2014/596) which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended and supplemented from time to time, until
the release of this announcement.

For further information, please contact:

 Jet2 plc                                               Tel:          0113 239 7692

 Steve Heapy, Chief Executive Officer
 Gary Brown, Group Chief Financial Officer
 Institutional investors and analysts:                  Tel:              0113 848 0242

 Mark Buxton, Finance and Investor Relations Director
 Cavendish Capital Markets Limited - Nominated Adviser  Tel:          020 7220 0500

 Katy Birkin / Camilla Hume / George Lawson
 Canaccord Genuity Limited - Joint Broker               Tel:          020 7523 8000

 Adam James / Harry Rees

 Jefferies International Limited - Joint Broker         Tel:          020 7029 8000

 Ed Matthews / Jee Lee
 Burson Buchanan - Financial PR                         Tel:          020 7466 5000

 Richard Oldworth / Toto Berger

Notes to Editors

Jet2 plc is a Leisure Travel Group, comprising Jet2holidays, the UK's leading
provider of ATOL protected package holidays to leisure destinations across the
Mediterranean, Canary Islands and European Leisure Cities and Jet2.com, the
UK's third largest airline by number of passengers flown, which specialises in
scheduled holiday flights. In its most recent financial year ended 31 March
2024, over 68% of flown passengers took an end-to-end package holiday with the
remainder taking a flight-only.

Jet2 currently operates from 12 UK airport bases at Belfast International,
Birmingham, Bournemouth, Bristol, East Midlands, Edinburgh, Glasgow, Leeds
Bradford, Liverpool John Lennon, London Stansted, Manchester and Newcastle. A
13(th) UK base at London Luton airport will commence operations in April 2025.

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