Key facts
- Jet2 received a £400 million boost from favorable fair value movements in jet fuel derivatives.
- The company had secured low jet fuel prices through fixed contracts with suppliers.
- Jet2 sold 19.9 million seats for the current summer, a 7% increase year-over-year.
- A new £250 million share buyback program was announced.
- Cash inflow decreased by 67% to £77 million for the year ending March.
- Revenue rose 4% to £7.5 billion, while profit before tax fell 7% to £551 million.
Jet2 has reported a significant £400 million boost to its balance sheet, primarily driven by favorable movements in its jet fuel derivative contracts amid rising global fuel prices. The company had previously secured low fuel prices through fixed contracts, which saw their value increase as market prices escalated due to the Middle East conflict.
Despite widespread fears of summer holiday cancellations and airline financial distress caused by the conflict, Jet2 stated it defied the travel chaos. The firm's annual accounts revealed an extra £388 million in income attributed to these favorable fair value movements in jet fuel derivatives. This financial benefit occurred as the UK had faced warnings about its exposure to a jet fuel crisis earlier in the year.
Jet2 also highlighted strong booking momentum in recent weeks, attributing this to reduced geopolitical uncertainty. The company has sold 19.9 million seats for the upcoming summer, a 7% increase from the previous year. Reflecting its strong liquidity and confidence in the future, Jet2 announced a new £250 million share buyback program.
However, the airline acknowledged that travel uncertainty stemming from the conflict has led holidaymakers to book more last-minute than usual. This trend contributed to a 67% decline in cash inflow to £77 million for the year ending March, as customers delayed bookings. While revenue jumped 4% to £7.5 billion, profit before tax slipped 7% to £551 million, partly due to lower income from cash deposits.
In terms of operational growth, Jet2 increased its seat capacity by 8% to 24 million in the past year, flying 20.8 million passengers, a 5% increase. The company also marked a significant expansion with a new six-aircraft operation at Gatwick. Chief executive Steve Heapy noted the company took more customers on holiday than ever before, achieved record revenue, and delivered a resilient operating profit despite investments and industry cost pressures.
Founded in 2003 and based at Leeds Bradford Airport, Jet2 offers a wide range of travel options across numerous destinations. The company's stock has experienced a decline of over 5% on the AIM market so far this year.