Jet2 PLC: ‘Encouraging signs for 2024’

Jet2 PLC issued rosy figures in November, increasing half-year pre-tax profits by 32% to £664.6 million.
 
The figure, for the always profitable six summer months to 30 September, led Jet2 to predict a full-year result of between £480 million and £520 million after winter losses are calculated.
 
Jet2 had a good summer 2023, with an identical load factor to 2022 of 90.7% despite a 7% capacity increase and with higher margins. The average price of a Jet2holidays package increased by 11% to £855.
 
Flight-only sales also did well. Net ticket yield per passenger stood at £124.09, compared with £105 in 2022, an increase of 18%. Looking ahead, Jet2 is leading from the front, increasing current winter capacity by 21% year-on-year.

Last summer, 71% of its sales were Jet2holidays packages – up from 66% – and the brand is ambitious in this sector. It snatched market leadership from Tui by adding 850,000 seats to its Atol in September, giving it 6.7 million in total, although the jury is out as to whether those extra seats will actually appear in the market.
 
In November, Jet2 put seat capacity for summer 2024 at 17.19 million seats, around 12% higher than summer 2023. It said bookings and pricing “at this early stage are encouraging”, with average load factors two points ahead of summer 2023.

Atol: 6.7 million

Tui: ‘Back in the black’

In December, Tui revealed 2022/23 full-year group profits of €977 million – its first return to the black since the pandemic – and record revenue of €20.7 billion.
 
Tui’s northern region, which includes Tui UK and Ireland, recorded underlying pre-tax profits of €71 million, compared with a €102 million loss in the previous year. Tui Group said the UK and European markets were in good shape, with average selling prices up by between 3% and 5% for summer 2024 despite Tui’s UK average 2023 summer prices increasing by a quarter on 2019.
 
The optimism at Tui’s Hannover HQ continues; unusually, Tui gave a firm profits forecast for 2023/24, with Mathias Kiep, Tui Group chief finance officer, predicting: “We will grow by at least 25% from the €977 million in 2023.”

In 2024, we can expect Tui to deliver more dynamic packaging, and more excursion and accommodation-only sales, helped by a global rollout of its new app. This will allow Tui to capture customer data – something seemingly at odds with its revived interest in selling through independent agents.

Atol: 5.9 million

EasyJet holidays: ‘A phenomenal success’

In Tui’s rear view mirror is easyJet holidays, which more than tripled its pre-tax profits to £122 million in the year to 30 September 2023, compared with £38 million previously – outclassing Tui’s UK operation.

EasyJet holidays’ passenger numbers increased from 1.1 million to 1.9 million last year. Its profit margin before tax jumped from 11.7% to 14.8%, compared with Tui’s of around 5%, underlining easyJet’s low-cost base. In its 2024 financial year, easyJet holidays expects to grow by more than 35%, taking its UK market share to 7%.
 
EasyJet group chief finance officer Kenton Jarvis told analysts late last year the airline’s tour operation only took up 4% of its seats: “Just 4% of the airline drives 5% market share [of the tour operation],” he revealed, adding easyJet holidays therefore only needed 10% of airline capacity “to make £250 million”.
 
The operator's chief executive, Johan Lundgren, described the venture, launched in 2019, as “an absolutely phenomenal success”. “We see it going way over £250 million medium-term. It is a digital model with a less than 4% fixed cost base. You will not find that with any competitor.”
 
Lundgren said easyJet holidays was 30% sold for summer 2024 at “really good” prices. The operator has 2.3 million seats licensed for 2024, up by nearly a million on 2023. EasyJet holidays believes its flexible business model also affords it an advantage over Tui and Jet2holidays, which have more fixed capacity tied to airline seats and hotel contracts.

Atol: 2.3 million