Profits soar at Jet2’s owner
Jet2.com owner, Dart Group, has seen revenues jump 34% after reporting a strong summer season for passenger volume growth.
The business, which has its headquarters in Leeds and specialises in holiday travel and freight operations with its FowlerWelch group company, posted revenue of £1.66bn for the half year to the end of September. This is up from £1.24bn in the comparable period in 2016.
Jet2holidays andJet2.com continued to experience passenger volume growth, though the group reported a “challenging season” in terms of pricing. Airline ticket yield per passenger sector stood at £75.95, a 17% reduction from £91.88 last year. However, the group achieved a 41% increase in seat capacity.
Passenger volumes for this summer saw a total of 7.14m passengers (2016: 5.07m) fly with Jet2.com. The overall load factor remained in line with last year at 93.2% and included the first season of operation from two new operating bases at London Stansted and Birmingham airports. Jet2holidays took 1.81m (2016: 1.28m) customers on holiday, an increase of 41%.
Group operating profit increased by 22% to £204.9m (2016: £167.5m) and group profit before foreign exchange revaluation and tax by 18% to £198.2m.
However, Dart said increased losses are to be expected in the second half of the year as it continues to invest in additional aircraft, advertising and people in readiness for further flying programme expansion at all of its operating bases in the summer 2018 season.
Executive chairman Philip Meeson said: “Leisure travel customer volumes were strong during summer 2017 and since the half year end, we have seen a further strengthening of customer demand, particularly for our flight-only product. This has resulted in future leisure travel bookings for this financial year performing ahead of expectations. As a result, the board is optimistic that market expectations of group profit before foreign exchange revaluation and tax for the year ending 31 March 2018 will be materially exceeded.
“Looking further ahead, whether this strength in demand will remain in the medium term is unclear and will depend on the evolving competitive environment. Pleasingly, we have been encouraged by the performance of our two new operating bases and are committing additional aircraft to continue our growth at these and at our other bases for summer 2018. However, we are seeing the emergence of certain cost pressures as we continue to invest in our airport operations, colleagues and other related areas.
“Nevertheless, and despite the current uncertainty around the ”Brexit ” negotiations, we remain confident in the resilience of our leisure travel business, supported by our recent elevation to the UK’s second largest package holiday operator.”
In view of the outlook for the full year, Dart is to pay an increased interim dividend of 1.5p per share (2016: 1.375p).
The group’s half year report stated that total capital expenditure stood at £90.4m, rising from £80.1m in the same timeframe last year. This included the purchase of new Boeing 737-800NG aircraft plus pre-delivery payments, wich have been substantially financed, for further new aircraft deliveries.
The fleet was expanded to 75 aircraft for summer 2017 (summer 2016: 64) with increases in pilots, engineers and cabin crew.
