How losses widened at Leeds-based holiday airline Jet2

The UK Government's traffic light system, introduced in an attempt to curb the spread of Covid-19, led to fragile consumer confidence.

The Leeds-based firm reported a post-tax total loss of £163.5m, down 138 per cent from a loss of £68.7m last year, for the six months ended September 30,2021.

However, revenue was up 43 per cent from £299.9m to £429.6m.

Philip Meeson, executive chairman of Jet2, said: "The first three months of the financial year saw little change in the significant challenges facing the leisure travel industry, with no scheduled flying activity in the period from 1 April to 24 June 2021.

"Although the UK Government's decision to allow quarantine-free travel to Amber list destinations for those fully vaccinated from 19 July 2021 was a welcome step in the right direction, the limited number of Green destinations and fragile consumer confidence arising from the three-weekly Government traffic light reviews undertaken throughout the period, meant that customer bookings were significantly closer to departure than normal."

While seat capacity for the period increased by 86 per cent to 2.68 million, up from 1.44m, average load factor fell to 57.3 per cent from 69 per cent with load factors to Amber destinations, primarily popular high-volume leisure destinations, more than 20 percentage points lower than those for Green destinations, as customers remained anxious they could quickly be changed to Red, meaning enforced quarantine on return to the UK.

Fragile consumer confidence arising from the three-weekly UK Government traffic light reviews undertaken throughout the period meant that customer bookings were significantly closer to departure than normal, leading to a reduction in average flight-only ticket yield per passenger sector of 25 per cent year-on-year.

In order to meet the future anticipated growth of its leisure travel business and to refresh its existing aircraft fleet, Jet2 entered into agreements with Airbus for 51 new A321 NEO aircraft, with the option to extend the order up to 75 aircraft.

The Leeds-based firm is expecting further losses in the second half of the year as a result of a competitive pricing environment being experienced for winter 21/22 and an investment in its own operations in the remainder of this financial year in readiness for the firm's flying programme expansion in the Summer 2022 season.

Forward bookings for winter 21/22 have been markedly stronger and average load factors much improved, following the recent dissolution of the Green and Amber lists from October 4 and the easing of passenger testing requirements.

Bookings for next summer, for which package holiday bookings are displaying a materially higher mix of the total, are encouraging, Jet2 said, with average load factors ahead of summer 2019 at the same point.

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James Mitchinson