Jet2 profits down in wake of complaints over delays

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JET2’s parent company Dart Group announced a fall in ​half year ​profits after ​it made ​a​ £17m​ exceptional provision ​to cover payouts to passengers who have suffered delays ​due to technical reasons.

The provision was made after ​​The Supreme Court rejected an appeal by Jet 2 over a compensation case relating to a man from Stockport who was refused compensation following a 27 hour delay on a flight from Malaga.

Experts believe the case could herald a flood of complaints from other passengers.

Leeds-based Dart said that after this exceptional item, pre-tax profits fell eight per cent to £71.7m in the six months to September 30.

​Without the item, ​​underlying pre-tax profit rose 14 per cent to £88.7m.​

Group revenue increased 15 per cent to £902.2m​.​

Dart’s chairman Philip Meeson said: “​​The increase in underlying ​g​roup operating profit reflects improved trading in our ​leisure ​travel business in the later summer months, which was in contrast to the challenging market conditions experienced earlier in the season.​”

​However​ he warned that ​increased losses are to be expected in the second half of the year ​following investment in the group’s growing leisure ​t​ravel ​business, which​ flies passengers to popular destinations in the Mediterranean, the Canary Islands and ​major ​European ​cities.

​He said that winter booking are in line with expectations and the group should meet full year profit forecasts.

The group spent £25.5m on investment in the long-term maintenance of its aircraft fleet.

A further four aircraft will come on stream in readiness for next summer.

​In the​ leisure travel division, flight-only passenger numbers rose by eight per cent to 3.07 million and Jet2holidays took 770,000 customers on holiday, up 21 per cent on last year.

“This growth is a reflection of the popularity of both our flight-only and package holiday products with package holiday customers now making up 33 per cent of all passengers,” said Mr Meeson.

​The group’s​ leisure airline, Jet2.com, flew 4.6 million passengers, an increase of 12 per cent on the same period last year.

Overall net ticket yield of £79.99 was down 1.6 per cent as early season demand was slower than expected, particularly to Canary Islands and Eastern Mediterranean destinations.

Retail revenue, or non-ticket revenue, per passenger increased by five per cent to £34.04 following a focus on pre-departure and in-flight sales.

The average price of a package holiday rose by three per cent.

As a result, ​l​eisure ​t​ravel revenue grew by 16​ per cent​ to £824.1m ​and u​nderlying operating profit grew 10.6​ per cent​ to £87.8m.

​Over the​ summer the leisure travel business operated 54 aircraft from its eight Northern UK bases - Leeds Bradford, Manchester, Newcastle, Blackpool, East Midlands, Edinburgh, Glasgow and Belfast International airports.

“We will continue to develop our customer-focused flying programme into summer 2015, which will also include the addition of four new destinations - Antalya in Turkey, Enfidha in Tunisia, Kefalonia in Greece, and Malta,” said Mr Meeson.

Dart’s Fowler Welch distribution and logistics arm reported a slight revenue reduction of £100,000 to £78.1m while like-for-like operating profit of £2.1m was in line with the previous half year, at an operating margin of 2.7 per cent.

Overall operating profit fell 11​ per cent​​ to £1.6m as a result of expected start up losses at ​a new joint venture operation.

​Dart said that margins are encouraging in this business and with volumes now committed for the remainder of the current year.