Jet2, Britain’s biggest tour operator, upgraded its annual profit forecast and said trading for the coming summer was encouraging with demand for holidays continuing to defy the UK’s gloomy economic outlook.
Jet2’s positive update is the latest evidence that British consumers are prioritising holidays despite cutting back elsewhere due to cost of living pressures from inflation which has been in double digits since September.
EasyJet EZJ.L on Tuesday said its profit would beat forecasts, while Ryanair RYA.I, Europe’s biggest airline, said on Wednesday there was no sign consumers were tightening their belts.
For the 12 months to the end of March, Jet2 said it now expected profit to come in between 387 million pounds ($482 million) and 392 million pounds, up at least 5% from the bottom end of the previous range given in January.
Jet2, which last year took 5.9 million passengers on holiday overtaking TUI TUIT.L to become Britain’s biggest tour operator, said summer pricing remained strong and margins per passenger were encouraging.
“This market share momentum corroborates our view that Jet2 should be seen as a structural winner,” said Stifel analyst Mark Irvine-Fortescue, adding that whatever the path of the economy, he expects Jet2 to see further gains in the coming years.
The group plans to expand capacity by 7% this summer compared to last summer, but said it was too early to forecast profit and noted the threat of European air traffic control disruption plus higher fuel and wage costs.
Shares in Jet2, which has a market capitalisation of 2.8 billion pounds, have risen 39% in the year to date. They traded up 1% in early deals on Thursday.
(Reuters)