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Jet2 Shares Jump after Lifting Outlook – Airline Stocks Boosted

Sam Boughedda
Sam Boughedda trader
Updated 24 Nov 2022

Jet2 (LON: JET2) shares rallied at the start of Thursday’s session on the back of its interim earnings release for the six months to September 30, which saw it return to profit and lift its full-year outlook.

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The leisure travel company and airline’s shares are up more than 6% at the time of writing, also lifting other London-listed airlines such as IAG (+1.2%), TUI (+3.4%), and EasyJet (+2.7%).

First-half revenue surged 730% to £3.57 billion, while profit before foreign exchange revaluation and tax hit £505 million, up from a loss of £195.1 million in the year-ago period. It was also 44% ahead of the 2019 pre-Covid performance.

Despite the general economic downturn, travel demand has remained robust, with other airlines also reporting positive trends. Jet2 seat capacity increased 14% compared to 2019, with “buoyant customer demand” resulting in the business achieving an average load factor of 90.7%, compared to 2019’s 93.1%.

In addition, higher margin package holiday customers’ mix of total departing passengers was 65.9%, up from 52.8% in 2019.

Jet2 said the disruptions across the aviation sector and its supply chains in mid-summer impacted its operations and resulted in significant delays and compensation costs above £50 million.

Looking ahead, Jet2’s winter 2022/23 bookings are encouraging, and pricing remains robust. However, it noted that “the important post-Christmas booking period is still to come.” Even so, the company is on track to exceed current average market expectations for group profit before FX revaluation and taxation for the year ending March 31, 2023.

Jet2 did, however, state it faces input cost pressures, including fuel, carbon, wage increases, and a strengthened US dollar.

“We remain confident that our Customers’ eagerness to take their much valued and anticipated holidays will remain high,” said Jet2. “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 declared an interim dividend of 3p per share.

Sam Boughedda
Sam is a trader and lead stock market writer at AskTraders. After starting his career in the forex market, Sam now focuses on stocks, specifically consumer staples.