Jet2’s Financial Setback Holiday group Jet2 recently disclosed that it incurred a financial hit of approximately £13 million due to “significant” disruptions caused by a recent air traffic control failure and wildfires in the popular destination of Rhodes. Despite these challenges, Jet2 remains confident in surpassing its year-end results forecasts for the period ending in March of the following year, thanks to robust summer bookings.
Air Traffic Control Failure and Wildfires On August 28, during a peak period for air travel and a bank holiday Monday, over a quarter of all flights to and from UK airports were canceled. This substantial disruption was a consequence of National Air Traffic Services (Nats) being unable to automatically process flight plans. The impact was felt by approximately 250,000 passengers, and flight cancellations persisted for two additional days as aircraft and crews needed to be repositioned, leaving many travelers stranded abroad.
Industry-Wide Frustration Airlines expressed frustration at the timing of this incident, as it occurred during one of the busiest periods of the year when the aviation sector had limited spare capacity, coinciding with the end of the summer break for numerous schools. This disruption followed closely on the heels of wildfires that ravaged various parts of Europe due to a scorching heatwave in late July. The Greek island of Rhodes was particularly hard-hit, resulting in the rescue of thousands of British tourists. At the time of the fires, it was estimated that up to 10,000 Britons were present on the island.
Jet2’s Response and Resilience Jet2 highlighted the dedicated efforts of its staff in assisting affected holidaymakers during the turbulent period brought about by the Rhodes wildfires and the Nats incidents. The company emphasized the contributions of its UK operational and head office support teams, as well as its overseas teams at destination airports and in resorts, as a significant differentiator. Despite these disruptions, Jet2 reported that its summer holiday capacity experienced a slight decrease, from 15.29 million air passenger seats in early July to 15.26 million. However, this figure still represented a 7.3% increase compared to the previous year. The months of July and August witnessed a surge in late bookings, and this trend is continuing into September. Additionally, winter bookings are showing promise, with a 20.4% year-on-year increase to 4.47 million seats in the holiday program.
Positive Outlook Jet2 remains optimistic about its financial performance, even in the face of the recent challenges. The company anticipates annual group pre-tax profits, based on a constant currency basis, ranging from £480 million to £520 million. This projection reflects a substantial improvement from the £390.8 million reported for the fiscal year 2022-2023. Despite absorbing approximately £13 million in costs and lost margins due to the Rhodes wildfires and the Nats air traffic control failure, Jet2 is confident in exceeding current market expectations for group profit before foreign exchange revaluations and taxation for the year ending March 31, 2024.
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