The airline and operator on Thursday (6 July) revealed a pre-tax profit of £371 million for its 2022/23 full-year (year to 31 March 2023), a wholesale swing from a £389 million loss in its previous full-year.

This also compares with a £153 million pre-tax profit in its 2019/20 full-year (year to 31 March 2020), which was only marginally affected by the onset of the pandemic.

Jet2.com flew 16.22 million passengers during its latest reporting period on a load factor of 90.5%, with package holiday customers representing nearly two-thirds (65%) of those who travelled with the company, up from 51.3% a year earlier and 13.2 percentage points ahead of 2019/20.

The company has also committed to restoring its employee and management bonus schemes, and will increase the 8% pay increase it gave employees over the last year to 9% for the year to 31 March 2024.

Executive chair Philip Meeson, who plans to step back into a non-executive director role, said this trend towards "higher margin" package customers had continued, with the mix running to nearly three-quarters (73%) of departing passengers – five percentage points higher than last summer, albeit on a marginally reduced overall summer load factor.

Operating profit, meanwhile, ran to £394 million versus a £324 million loss a year earlier, and was up 34% on 2021/22 from £293 million. Jet2 said that this came despite absorbing costs arising from delays and subsequent passenger compensation of in excess of £50 million – "a direct impact of the broader disruption seen across the aviation section and its supply chains in mid-summer 2022".

This largely came in the form of EU261 compensation, said Jet2.

Meeson said that while the group was facing various cost pressures such as fuel, carbon taxation, wage increases and a strong US dollar, as well as investment in supporting the wellbeing and work-life balance of its workforce, pricing for both package and flight-only bookings were "robust" and margins per booked passenger "satisfactory".

However, he sounded a note of caution, stressing that while he believed Jet2’s flexible package proposition was right for the times, the business wouldn’t lose sight of "how quickly the macro-economic environment is evolving and how this may affect customers’ future spending".

He declined to provide guidance on group profitability for the coming year owing to the significant proportion of the summer 2023 season that is yet to unfold, and with "the majority of winter 2023/24 seat capacity still to fill".

Backing for staff

Meeson said Jet2 had successfully tapped the "enormous surge of pent-up demand" for post-Covid travel despite "unprecedented challenges", including what he described as a "difficult return to normal operations" which he put down to inadequate planning and preparedness on the part of "many airports and associated suppliers".

Key to Jet2’s successful emergence from the pandemic, said Meeson, was the company’s decision during the Covid crisis – most notably in late-2021 – to retain more than 8,000 employees and then to both recruit and train new staff in a timely fashion for summer 2022. In addition, he said the airline and operator made "early and substantial" investments in marketing and "meaningful salary increases".

Jet2 awarded pay increases totalling 8% during its 2022/23 financial year, along with an end of summer "thank you bonus" of £1,000 per employee. It has also resolved to award its staff a 9% pay increase for its 2023/24 full-year. "We firmly believe happy and well-paid colleagues are fundamental to the future success of our business," said Meeson.

Meeson added the group’s strong financial performance had allowed it to reinstate both its discretionary colleague profit share scheme for non-management employees and its discretionary bonus scheme for those in management for the first time in four years. Awards under these schemes will be paid in Jet2’s July 2023 payroll.

Julie Palmer, partner at financial advisory company Begbies Traynor, said Jet2 was well-placed to capitalise on the post-Covid rebound in holiday demand.

“Tougher times for consumers didn’t dent demand and Jet2 believes well-priced and flexible breaks will remain popular as customers seek better value, a sector in which the company will benefit as holidaymakers increasingly turn to the package deals it offers. The traditional two weeks in the sun could become 10 days or a week as consumers look to trim costs, a trend which Jet2 is ready to capitalise on," Palmer commented.

"The focus is now on whether this summer will see a repeat of last year’s troubles, with demand already close to last year’s levels just as Jet2 faces higher costs including rising wages, more expensive fuel and green taxes.

“Jet2 looks to have done what it can to prevent a repeat of last summer’s airport breakdowns – but its fate could be in the hands of others.”