Jet2 flying high as demand for summer holidays defies crisis

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TIMES are tough and money is short, but northerners are still escaping the economic gloom by flying off on family holidays, according to the company behind budget airline Jet2.com

Dart Group, which is based at Leeds-Bradford airport, has reported a rise in full year turnover and profits, after its performance was boosted by a strong summer trading performance.

Turnover grew by 26 per cent to £683m in the year ended March 31, 2012. Profit before tax was £28.1m, an increase on the £26.2m recorded the year before.

Earnings per share increased by 31 per cent to 16.01p.

Philip Meeson, the company’s chairman, said yesterday: “The significant growth in turnover reflects expansion in both Jet2.com, the group’s leisure airline and Jet2holidays, our package holiday business, which more than doubled its passenger numbers in the year.

“Profits in leisure airline fell, despite capacity and load factor growth, mainly due to increased jet fuel prices which we were not able to pass on to our customers. Jet2holidays, which goes from strength to strength, recorded a profit before tax of £2.5m on the back of a 140 per cent increase in turnover.

“Our distribution and logistics business, Fowler Welch, improved operating margins after a year of investment and restructuring in 2010/11, and returned a profit before tax of £3.9m.”

Mr Meeson said that, over the past year, the company has concentrated on building services to high volume leisure destinations. It has focused on “politically risk free” Mediterranean and Canary Islands resorts and leisure break cities.

More than 60 summer routes are operated to Spain, which is still the most popular destination for UK holidaymakers.

In the year to March 31 2012, Jet2.com operated 145 routes from its eight northern bases to 49 destinations.

Mr Meeson added: “We flew 4.3 million scheduled service passengers and sold over 200,000 package holidays. We expect to increase our passenger numbers by approximately 10 per cent and to double the number of package holidays sold in the current financial year.”

In March, the company opened its eighth base at Glasgow airport. It also added an extra aircraft to its East Midlands and Newcastle bases.

Mr Meeson added: “While the summer leisure business thrives, the winter has grown quieter as the economy has tightened.

“This has resulted in 80 per cent of our leisure travel turnover occurring in the seven months from April to October.”

Although ski destinations provide important winter use for Jet2.com’s aircraft, volumes in this sector have decreased, Mr Meeson said.

“So our strategy of reducing our ski flight frequencies and concentrating on weekend flights has proved sensible,’’ he add- ed.

The company has flown night mail flights for Royal Mail since 1980, helping to ensure that First Class mail achieves next day delivery in the UK.

Under the current contract, which started in 2004, the company has operated 16 night mail flights each weekday night. The last flight under the present contract is in October 2014.

Royal Mail is tendering the contract during this financial year, with the result expected in the first quarter of 2013.

Mr Meeson said: “We take a careful and considered view of expansion in our leisure airline business, especially in the current economic climate.

“However, we are certainly optimistic for our continued growth in the holiday market.

“We hope to renew our contract with Royal Mail but, should that not be possible, we believe that organic growth will compensate in terms of maintaining the current level of employment and profitability.”

Mr Meeson said that Fowler Welch was in good shape for future profitable growth.

He added: “We plan to grow each of our businesses in the year ahead.

“Fowler Welch has a number of business development opportunities throughout its network and is benefiting from recent wins in the North West.

“Jet2holidays is set for further growth in the current year, with forward bookings at encouraging levels.

“We have expanded Jet2.com’s flying programme by 10 per cent for summer 2012, although margins remain challenging in this sector.

“We are encouraged both by these business opportunities and by the start we have made to the current year, but in the current economic environment we are cautious in respect of profit growth.”

greg.wright@ypn.co.uk