Jet2 (LSE: JET2) is heading towards the end of its financial year on a high, expecting pretax profit of up to £570 million—an 8% to 10% jump on last year. But while the airline and holiday operator is pleased with its position, the outlook isn’t without challenges.
UK holidaymakers are booking later than before, a trend that persisted throughout summer 2024 and is continuing into winter. March bookings have been notably weaker, partly due to the later timing of Easter, dragging down load factors. Despite this, Jet2’s overall pricing remains competitive, and demand for summer 2025 is already looking healthy, with an 8.5% increase in capacity planned.
Expansion is also on the cards, with new bases at Bournemouth and Luton boosting seat numbers. However, the Luton base, launched late in 2024, is still catching up with established locations, posting lower average load factors.
Jet2’s fleet is growing, with 14 more Airbus A321neo aircraft due for delivery by next summer, but delays will mean extra costs to plug operational gaps. And costs are rising across the board. Wages, National Insurance, hotel prices, aircraft maintenance, and airport fees are all heading upwards, while mandated increases in sustainable aviation fuel will add over £20 million to expenses.
CEO Steve Heapy remains confident that demand for holidays will hold up, but he acknowledges the squeeze on consumer incomes. As a result, margins could feel the pressure in the year ahead.
Investors weren’t thrilled by the update—Jet2 shares fell 9.4% in early trading, making it the worst performer in the AIM 100.
A clearer picture will be provided in April’s trading update, with a full outlook for summer 2025 expected in July.
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