Jet2 parent sees shares jump on the back of strong bookings
Shares in Jet2’s parent jumped today after it said it would ‘significantly’ beat market expectations for profit based on strengthening bookings and encouraging consumer demand.
Dart Group’s shares were 5.8% higher in morning trade as the group reported its half-year financial results.
Pre-tax profit rose 2% higher to £339.7 million for the six months to September 30 while revenue increased by 16% to £2.62 billion.
But looking further ahead, the group warned of potential ‘headwinds’, including whether the UK gets a ‘pragmatic and balanced’ Brexit agreement and other cost pressures, such as fuel, foreign exchange, carbon and other operating charges.
"These, together with the necessary continued investment in our own products and operations, including that required to attract and retain colleagues, are headwinds that our leisure travel business faces," it said.
Executive chairman Philip Meeson added: "The modest increase in profitability reflected a later customer booking pattern in our leisure travel business, as customer demand strengthened throughout the course of the summer season.
"As is typical for the business, losses are still to be expected in the second half, as we continue to invest in additional aircraft and their associated infrastructure, together with the increasing cost of retaining and attracting colleagues in readiness for further flying programme expansion at several of our UK operating bases in the summer 2020 season."
Jet2’s flight-only product carried 4.75 million passengers, up 8% on the previous year.
Its tour operator, Jet2holidays, took 2.71 million customers on package holidays, a rise of 17%.
Package holidays now represent 53% of flown customers, compared to 51% last year.
Average flight-only ticket yield per passenger sector at £88.87, 1% higher than the prior year.
Dart Group said this reflected the ‘strong late booking trend and associated pricing, offset by increased levels of promotional pricing required to remain front of customers’ minds earlier in the summer season’.
The average price of a Jet2holidays package holiday grew by 2% to £702.
As a result, overall leisure travel revenue grew by 17% to £2,528.8 million.
Though revenue growth was strong, operating profit margin reduced to 14% due to the cost of fuel, the weakness of sterling against the Euro and US dollar, and real wage increases, which were not fully passed on to the customer.
This meant operating profit increased 3% to £361.5 million.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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