Jet2 plc
PRELIMINARY UNAUDITED RESULTS FOR YEAR ENDED 31 MARCH 2022
Jet2 plc , the Leisure Travel group (the “Group” or the “Company”), announces its preliminary results for the year ended 31 March 2022. These results are presented in accordance with UK-adopted international accounting standards and applicable law.
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Overall liquidity improved significantly with total cash balances (including money market deposits) at the year-end of £2,228.5m (2021: £1,379.0m), an increase of 62%. 'Own Cash'† which excludes customer deposits increased by 2% to £1,083.8m (2021: £1,061.7m). |
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Although seat capacity increased to 7.01m (2021: 2.00m), and average load factor % increased to 69.2% (2021: 66.0%), fragile consumer confidence arising from the three-weekly UK Government “traffic light” reviews during Summer 21, meant customer bookings were significantly closer to departure than normal, leading to a reduction in average flight-only ticket yield per passenger sector of 29% year on year. |
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As a result, Jet2.com flew a total of 4.85m single sector passengers, an increase of 267% (2021: 1.32m). Jet2holidays package holiday customers represented 51% (2021: 58%) of the overall mix of flown passengers at 1.29m customers (2021: 0.37m), an increase of 249%. |
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Group operating loss reduced by 4% to £323.9m (2021: £336.1m) and Group loss before foreign exchange revaluation and taxation increased by 1% to £376.2m (2021: £373.8m). |
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In order to meet the future anticipated growth of our Leisure Travel business and to refresh our existing aircraft fleet, we were delighted to enter into agreement with Airbus for up to 75 new A321 neo aircraft, of which 60 are now firm orders. |
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Pleasingly, over 35% of our Summer 22 bookings are completely new customers to Jet2 and package holiday bookings are displaying a materially higher mix of the total up 13ppts. Average load factors are only 1.4ppts behind Summer 19 (against the 14% increase in seat capacity), whilst pricing remains robust. |
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Although we invested well ahead of the Summer 22 season to ensure we had adequate resources to be able to operate efficiently, we have been directly impacted by the broader disruption seen across the aviation sector and its supply chains. Many Suppliers have been woefully ill-prepared and poorly resourced for the volume of customers they could reasonably expect, inexcusable, bearing in mind our flights have been on sale for many months and our load factors are quite normal. |
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Consequently, Group performance for the financial year ending 31 March 2023 very much depends on how quickly the broader aviation sector returns to some level of stability, as well as strength of bookings for the remainder of Summer and the second half of the financial year, a period for which we still have limited visibility. |
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In the medium term, inflationary pressures coupled with the uncertain UK economic outlook for consumers, lead us to conclude that prices are likely to come under some pressure. However, we believe we have the right product for these tougher times. |
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The end-to-end package holiday is a higher yielding, resilient and popular product in difficult economic times and the control of our own seat supply and our frequency of flying, allow us to offer truly variable duration holidays, critical in allowing our Customers the ability to flex their holiday arrangements to suit their individual budgets. Our 'Customer First' ethos runs deep throughout our company culture with 'People, Service, Profits' our guiding principles. |
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With our healthy Own Cash position, well-capitalised Balance Sheet and having retained much of our knowledgeable and skilled pre-Covid colleague base, the Group remains well-positioned to grow its leisure travel offering. And, for the long-term, with our customer focused approach and Right Product for these Tougher Times, we believe that opportunities for us to grow share as a financially strong and trusted package holiday provider will only increase. |
† Further information on the calculation of this measure can be found in Note 8.
OUR CHAIRMAN'S STATEMENT
Back in April 2020 it was hard to imagine a scenario where the Leisure Travel industry would suffer such a prolonged period of extraordinary financial and operational challenges. However, the Covid-19 pandemic and its far-reaching consequences have tested us all.
Fortunately, the many decisive actions taken during the previous financial year meant the business entered the new financial year in April 2021 with a healthy 'Own Cash'† (excluding advance customer deposits) balance from which to make considered decisions, meaning our UK Leisure Travel Business – which encompasses Jet2holidays, our acclaimed ATOL licensed package holidays provider and Jet2.com, our award-winning airline – was well placed to weather a further period of difficult trading conditions, but was also able to respond swiftly once travel restrictions were finally relaxed and customer confidence began to recover.
Appreciation
Before commencing the detailed Statement, I want to record the Board's huge appreciation for all our Colleagues' tremendous support and efforts over recent months, which have enabled Jet2.com and Jet2holidays to take our Customers on their holidays. This has been achieved despite the currently very challenging airport, onboard and in-destination working environments, which have been exacerbated by many of our Suppliers' failure to adequately plan and resource for the post-Covid operational start up, as has been widely reported in the media.
Broadly, most of our 10 UK Base Airports have been woefully ill-prepared and poorly resourced for the volume of customers they could reasonably expect, as have other suppliers, such as Onboard Caterers and providers of Airport PRM (Passengers with Reduced Mobility) services. Inexcusable, bearing in mind our flights have been on sale for many months and our load factors are quite normal.
Theirs and the Ground Handling suppliers' often atrocious customer service, long queues for Security Search, lack of Staff and congestion in Baggage Handling Areas, and the consequent airport congestion, together with the frequent lack of onboard catering supplies, have each contributed to a very much poorer experience at the start and finish of our Customers' holidays than they were entitled to expect. Inevitably, these customer-facing challenges have put extra pressure on our Colleagues, both in the UK, onboard our aircraft and in our holiday destinations.
This difficult return to normal operations has occurred simply because of the lack of planning, preparedness and unwillingness to invest by many Airports and associated Suppliers.
As a result, Jet2.com and Jet2holidays management colleagues have worked hard to fully involve themselves in our operations and to ensure that our Colleagues are supported, encouraged, rewarded and properly appreciated. In this respect, we are very pleased to have awarded all our Colleagues a total pay increase of 8% with a further £1k to be paid to all Colleagues at the end of Summer 22.
We sincerely thank all our Colleagues for the support they have given and are giving our Company and our Customers at this, regrettably, very challenging time.