Jet2 Posts 43% Increase in 2020 Operating Profit, Weighs Downsizing Fleet Further

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Jet2 Boeing 737-800 at Roma Leonardo da Vinci/Fiumicino - LIRF, Italy Photo: Aldo Bidini GFDL 1.2

British low-cost leisure airline Jet2 released its Annual Report for 2020 on Monday. Although the leisure travel industry is facing unprecedented challenges due to the Covid-19 pandemic, the airline posted increase in revenue and passenger numbers.

Despite the fact that Jet2 had to suspend its flights in mid-March 2020 due to the travel restrictions imposed by governments across Europe as a result of the spread of Covid-19, the leisure travel business still achieved overall single sector flown passenger growth of 14% to 14.62 million, contributing to an increase in revenue of 21% to £3,584.7 million, according the report.

However, the company’s profit before taxation from continuing operations declined by 11% to £147.7 million (2019: £166.5 million) due to the impact of Covid-19. The airline’s overall operating profit (excluding hedge ineffectiveness) for the year increased by 43% to £293.0 million (2019: £204.5 million).

During the year, Jet2 flew a total of 14.62 million (2019: 12.82 million) flight-only and package holiday single sector passengers, a growth of 14%. Demand for the airline’s package holidays continued to grow, as Jet2holidays took 3.77 million (2019: 3.17 million) customers on package holidays, an increase of 19%, with the airline’s flight-only product enjoyed by 7.06 million (2019: 6.49 million) single sector passengers, a growth of 9%.

Jet2 Boeing 757
Jet2 Boeing 757-200 Photo: Ken Fielding/https://www.flickr.com/photos/kenfielding / CC BY-SA

Jet2 Downsizes Its Fleet and Workforce

The company’s directors have prepared financial forecasts for the Group, covering, among other things, its longer-term aircraft fleet objectives.

“Following on from the “no fly” period, all scenarios assume a gradual ramp up of flying operations, initially running at reduced average load factors and net ticket yields, significantly below historic levels. Despite the Group’s strong competitive position, due to the uncertainties around future demand, the forecasts cautiously assume that the productive aircraft fleet operating in the years ending 31 March 2022 and 31 March 2023 will be smaller than was flown in the year ended 31 March 2020.

In addition, and should customer demand be weaker than forecast, due to the mix of aircraft, the fleet could be downsized further so eliminating the fixed costs associated with those aircraft,” said the airline’s Executive Chairman Philip Meeson.

Jet2’s aircraft fleet expanded to 100 for summer 2019 (summer 2018: 90), with 3 new destinations added: Chania in Crete; Izmir in Turkey; and Bourgas in Bulgaria, supplemented by increased frequency of flying to many popular Mediterranean, Canary Island and European Leisure City destinations.

The airline also had to reassess and reduce its flying programmes for the remainder of 2020 and for 2021, the overall effect being the need to propose a number of colleague redundancies across the airline’s business.

Jet2 Will Emerge from the Crisis an Even Stronger Company

“We still face challenges as a result of the Covid-19 pandemic and therefore maintaining a healthy cash position remains our top priority. We have taken significant actions to improve our available liquidity in the last three months and will continue to do so, to ensure that we are best placed to respond swiftly as UK Government travel restrictions are relaxed and customer confidence recovers,” said the airline’s Executive Chairman Philip Meeson.

We remain confident that once normality returns, our Customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that Jet2.com and Jet2holidays will continue to have a thriving future, taking millions of UK holidaymakers annually, to the Mediterranean, the Canary Islands and to European Leisure Cities.”

According to the annual report the airline’s performance for the financial year ending 31 March 2021 is largely dependent on the level of flying permitted for the remainder of the summer 2020 period, as well as performance in the second half of the 2021 financial year, periods for which the airline currently still has limited visibility. Despite the uncertainty, the airline’s current monthly load factors for winter 20/21 are satisfactory and summer 2021 bookings, which are showing a materially increased package holiday mix, are encouraging.

“Jet2 will emerge from this crisis an even stronger company,” said the airline.

Jet2holidays is now the UK’s largest tour operator to many Mediterranean and Canary Islands leisure destinations and
Jet2 is the UK’s 3rd largest airline by number of passengers flown.

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