Owner of leisure airline Jet2.com says future performance will depend on ‘pragmatic’ Brexit deal

DART Group, the owner of the leisure airline Jet2.com, today said it had enjoyed a satisfactory first half of the financial year as it grows its range of flight-only and package holiday products.

By Greg Wright
Thursday, 21st November 2019, 10:14 am
Philip Meeson of Dart Group. Picture By Simon Hulme
Philip Meeson of Dart Group. Picture By Simon Hulme

However, the Dart Group said it was unclear whether the encouraging consumer demand for products would remain buoyant, because much depended on the Government securing a “pragmatic and balanced” Brexit agreement.

In the half year ended September 30 2019. group operating profit increased by 3 per cent to £365.0m and group profit before foreign exchange revaluation and taxation increased by 3 per cent to £349.8m.

Dart Group said the modest increase in overall group profitability reflected a later customer booking pattern in its leisure travel business, with customer demand strengthening throughout the summer season.

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The statement added: “As is typical for the business, losses are still to be expected in the second half, as we continue to invest in readiness for further flying programme expansion at several of our UK operating bases in the summer 2020 season.

“Pleasingly, profitability in our distribution and logistics business grew by 23 per cent to £2.7m, as the strategy of generating margin-enhancing new business opportunities plus improved operational effectiveness paid dividends.

“With leisure travel bookings continuing to strengthen and notwithstanding the important post-Christmas booking period that is still to come, the board now expects current market expectations for group profit before FX revaluation and taxation for the year ending 31 March 2020 to be significantly exceeded.

“In view of the outlook for the full year, the board has decided to pay an increased interim dividend of 3.0p per share.”

The statement from Philip Meeson, the company’s executive chairman added: “Looking further ahead, whether the currently encouraging consumer demand for our products remains buoyant in the medium term is unclear, as we believe that much will depend on the UK Government securing a pragmatic and balanced Brexit agreement with the EU.

“In addition, the travel industry in general continues to be subject to a range of cost pressures in relation to fuel, foreign exchange, carbon and other operating charges. These, together with the necessary continued investment in our own products and operations, including that required to attract and retain colleagues, are headwinds that our leisure travel business faces.

“Our strategy for the long term remains consistent - to grow both our flight-only and package holiday products. With our Customer focused approach and clear market positioning, we continue to have confidence in the resilience of both our leisure travel and distribution and logistics businesses.”

Over the period, Jet2.com flew a total of 10.07m flight-only and package holiday passengers to and from sun, city and ski destinations, including the new destinations of Chania in Crete, Izmir in Turkey and Bourgas in Bulgaria.

The company said the passenger increase of 13 per cent was slightly behind the seat capacity increase of 14 per cent and as a result, average load factors were a healthy 93.1 per cent as compared to the prior year of 94.4 per cent.

The average price of a Jet2holidays package holiday grew by 2 per cent to £702.

Jet2.com can trace its roots back to the commercial aircraft company Channel Express (Air Services). It changed its name to Jet2.com before its first leisure flight from Leeds Bradford Airport to Amsterdam in February 2003.

It was founded by Philip Meeson, 71, who spent his teenage years making model planes and learning how to fly in the Air Training Corps. After school, at Wellingborough, he signed on as a galley boy on a trawler and sailed up to Bear Island in the Barents Sea and back.

Back on dry land, Mr Meeson entered the RAF, and later formed a small business with a backer buying and selling second-hand training aeroplanes.