Airline facing £385m loss after a year of Covid-19 turbulence

EAST MIDLANDS CARRIER FEELING THE EFFECTS OF GLOBAL PANDEMIC

HOLIDAY company Jet2 has told shareholders it expects to report losses of up to £385m as the Covid pandemic continues to bite.

The airline, which has flights from East Midlands Airport, issued a trading update for the year ending March 31, 2021, saying the board expects it to swing from last year’s pre-tax profit of £264.2m to a pre-tax loss from continuing operations of between £375m to £385m.

The firm said that during the year it took “swift and decisive action” to raise close to £1bn from a range of sources to mitigate the impacts of the pandemic on its business.

In February, Jet2 raised £422m on the stock exchange with a shares placing and subscription.

As a result, it said it was in a strong cash position as of March 31 2021, with unaudited total cash of £1.379bn and “own cash” (excluding advance customer deposits) of £1.062bn – 104 per cent up on last year’s £520m.

It added: “This was after promptly returning over £1.3bn of customers’ deposits – for which we were commended by both the UK Civil Aviation Authority and Which? magazine.”

Despite the loss, the Leeds-based business said it was encouraged by the continuing successful rollout of vaccines in the UK and the increasing momentum in Europe, and that it welcomed confirmation from the UK Government’s Global Travel Task Force that international travel remained on track to reopen in mid-may. But it used the update to highlight its disappointment over the lack of detail on the task force’s ‘traffic light’ travel system for holiday destinations, which led to it suspending more flights.

It said: “This means the impact and duration of the proposed Covid19 travel restrictions for summer 2021 remain difficult to determine and due to this continued uncertainty, in fairness to all our stakeholders and especially our customers, we took the difficult decision to extend the suspension of our flights and holidays from May 17 up to and including June 23, by which time we are expecting more clarity.

“Both pre-pandemic and throughout the past 12 months, our airline, Jet2.com, has demonstrated a high level of operational flexibility by responding rapidly to evolving market conditions generating cash in doing so, and we retain that flexibility to react quickly as travel restrictions change.

“Unsurprisingly given the short-term uncertainty, customers are booking significantly closer to departure for summer 21.

“However, we continue to be encouraged by the volume of customer bookings for both winter 2021/22 and for summer 2022, for which package holiday bookings are displaying a materially higher mix of the total.”

The firm added that it was confident that once normality returned, customers would be determined to seek out Jet2 holidays.

We continue to be encouraged by the volume of customer bookings for both winter 21/22 and summer 22.

Jet2