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Jet2 hits record profits as airline industry makes swift recovery

Holiday firm Jet2 has said full-year earnings will be better than expected after swinging to a first half profit, despite a hit of more than £50 million from airport chaos. (PA Wire)
Holiday firm Jet2 has said full-year earnings will be better than expected after swinging to a first half profit, despite a hit of more than £50 million from airport chaos. (PA Wire)

Budget airline and package holiday provider Jet2 swung from deep losses to record profits in the first half of the year in latest sign of the industry’s remarkable recovery after two years of lockdowns and travel restrictions.

The company was £450.7 million in the black in the six months to September compared with a loss of £205.8 million for the same period last year which was still marked by severe Covid-era limits on foreign travel.

Sales jumped 730% on 2021 to £3.6 billion, while seat capacity increased 14% against 2019 levels, as a boom in package holidays fuelled by pent-up demand helped demand sail past pre-pandemic levels over the summer.

The strong results follow bumper first half profit from Ryanair earlier this month although rivals easyJet and Wizz Air are still mired in losses.

Jet executive Chairman Philip Meeson said: “Our leisure travel business has continued its encouraging recovery following the reopening of international travel in early 2022.

“Strong customer demand, in particular for package holidays, plus a robust pricing environment and considered cost control, have underpinned a substantially improved financial performance compared to recent Covid impacted summer seasons, but also against pre-Covid summer 2019.”

Jet2 shares climbed 3.7% to 925p. The strong results come after the airline said it planned to ramp up flight capacity through an order of dozens of new Airbus aircraft in a deal worth up to £7 billion.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Jet2’s swing from losses to profits can only be described as impressive, and reflects enormous increases in revenue as the industry recovers from tough lockdown restrictions.

“Its low cost offering means it’s more accessible than other brands during the cost-of-living crisis, and is likely to see customers who are forced to spend less on their next holiday choose Jet2.”

UK-listed airlines have added a combined £9 billion to their long-term debt since the start of the Covid pandemic, according to an Evening Standard analysis based on Bloomberg data, after scores of flight cancellations and travel restrictions forced firms to ground their aircraft or run at lower levels of capacity, pushing airports to the brink of collapse.

But the results comes amid reports the 100ml limit for taking liquids through airport security is to be scrapped in 2024, a potential boon to the airline industry which could slash airport security waiting times and ramp up passenger numbers after a wave of capacity cutbacks.

New advanced CT scanning technology is to be rolled out across UK airports over the next two years, which allow a greater degree of inspection of passenger bags and will enable the change in policy, according to the Times.

It is set to be the first time passengers can bring regular-sized drinks past airport security since 2006, when the 100ml rule was introduced following a terror plot involving liquid explosives disguised as soft drinks.