Jet2 PLC (AIM:JET2) (Jet2 PLC (AIM:JET2)) said that winter bookings this year were “satisfactory” and it remains on track to achieve the current market expectations on profit for the year.
Executive chairman Philip Meeson told shareholders that load factors are matching those of winter 2019/20, the last pre-Covid trading year.
Additionally, the group said it continues to benefit from significant investment in preparation for the summer period just gone, which allowed it to retain its employees and enabled its sale seat capacity for the season to be 14% higher than the same period in 2019.
Customer bookings have also remained “consistently strong,” as Jet2 notes the early summer chaos which led to airlines and airports mass cancelling flights at the last minute has “abated significantly.”
John Strickland, a director at airline consulting firm JLS Consulting believes that this winter, however, brings “more uncertainties than normal.”
“Winter is typically the down season in which most airlines lose money due to lower traffic volumes,” Strickland said.
“There are exceptions such as warmer southern Mediterranean destinations such as the Canaries to which most of the Low-Cost carriers are exposed.”
“This winter there are more uncertainties than normal with the upcoming shock to consumers’ budgets from rising gas bills and overall inflation.”
However, how this impacts each of the budget airlines varies on a case-by-case basis.
According to Strickland, “Ryanair has the financial muscle to price low due to a good hedging position.”
EasyJet and Jet2 “both have in-house holiday arms to appeal to price sensitive customers with all in package offers.”
One airline that may struggle, is Wizz Air.
“Whilst having low overall costs, (Wizz) is less well placed due to its decision to withhold until recently from hedging.”
“It needs to compete on price but doing so is likely to translate into larger losses during the winter months because of this handicap.”