Jet2 PLC's (AIM:JET2) latest update left analysts at Barclays and UBS largely unfazed for the short term - even if it left the shares 11% lower and put the frightener on the airline sector.
That said, both acknowledged the challenges posed by rising costs and economic uncertainty in 2026, the two major factors that unsettled investors.
Jet2 maintained its profit forecast of £560-570 million for the year ending March 2025, which sits just below the market consensus of £582 million.
Barclays noted that winter bookings were in line with expectations, with 14% capacity growth, though a later-than-usual booking trend was observed. UBS pointed out that summer 2025 capacity is up 8.5% with stable load factors, and package holiday pricing has ticked up modestly.
However, the bigger concern is 2026, where analysts highlighted cost headwinds, some specific to the company and some industry-wide.
A 3% pay rise for employees, higher hotel and airport costs, and an extra £25 million in wage and national insurance expenses could pressure profit margins. Jet2’s move towards sustainable aviation fuel will add £20 million to costs, further weighing on earnings.
Barclays and UBS also noted that Jet2’s new bases in Bournemouth and Luton will be “modestly loss-making” in their first year, meaning additional costs as the airline expands.
UBS suggested that while the 2025 outlook is stable, these uncertainties could put downward pressure on the share price as investors assess the long-term impact of rising expenses.
In afternoon trading, the stock was changing hands for 1,394.78p, down 177.22p.