Owner of Jet2.com to record charge of £109m after suspending operations for an indeterminate period

Dart Group, the owner of Jet2.com and Jet2holidays, said it will record an exceptional charge of £109m after suspending operations for an indeterminate period of time.
Dart Group has published a trading update.Dart Group has published a trading update.
Dart Group has published a trading update.

The firm said Jet2.com and Jet2holidays are currently on sale from June 17 in readiness for when its holiday flights can resume.

In a trading update, Dart Group said: "Further to the trading update issued on 18 March 2020, the board expects to report pre-exceptional group profit before foreign exchange revaluation and taxation for the financial year ended 31 March 2020 of between £265m - £270m, an increase of approximately 49% on the prior year.

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"Although Jet2.com and Jet2holidays are currently on sale from 17 June 2020 in readiness for when our holiday flights can resume, due to operations currently being suspended for an indeterminate period of time, the board estimates that the group will record a net exceptional charge of approximately £109m relating to ineffectiveness on a proportion of FY21 fuel and foreign currency hedges in the FY20 results.

"We continue to actively monitor the financial health of our hotel counterparts in respect of our advance deposits and their potential for recovery. Contractually the majority of these deposits are able to be reallocated to future seasons' bookings."

The statement added: "Despite the fact that Jet2.com had to suspend its flying programme in mid-March due to the unprecedented travel restrictions imposed by governments across Europe as a result of the spread of the Covid-19 virus, in FY20 our Leisure Travel business still achieved overall flown passenger growth of 14% to 14.6m and growth in Package Holiday customers of 19% to 3.8m, representing 52% of the overall mix of passengers flown, an increase of 3ppts."

"The impact and duration of Covid-19 remains difficult to determine, and the Board has no clarity as to how this will affect Group profit before foreign exchange revaluation and taxation for the financial year ending 31 March 2021.

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"In response, we have already taken many actions to underpin the stability of our business and preserve cash. With our aircraft fleet currently grounded, approximately 80% of our UK colleagues have been put on temporary leave of absence in order to make full use of the grants available under the UK Government's Coronavirus Job Retention Scheme Similar schemes are also currently in place for many of our overseas colleagues."

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