Key facts
- Jet2 reported a £388 million boost from favorable fair value movements in jet fuel derivative contracts.
- The company's fixed fuel contracts increased in value as market prices rose due to Middle East conflict.
- Summer holiday bookings have shown a recent rebound.
- Jet2 announced a new £250 million share buyback program.
- Revenue rose 4% to £7.5 billion, while profit before tax fell 7% to £551 million for the year ending March.
Jet2 reported a significant £388 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.
Summer holiday bookings have bounced back recently, with Jet2 stating that reduced geopolitical uncertainty has driven strong booking momentum. Shares in Jet2 jumped by about nine per cent in early trading following these comments. Destinations such as Turkey, Cyprus, eastern Greek islands, Bulgaria, and parts of North Africa have seen the most significant rebounds.
Despite operational challenges including new EU border check systems causing delays, Jet2 announced a new £250 million share buyback program. For the year ending March, revenue rose 4% to £7.5 billion, but profit before tax slipped 7% to £551 million, partly due to lower income from cash deposits and a 67% decline in cash inflow as customers delayed bookings.
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 year-over-year. Chief executive Steve Heapy also warned against treating the aviation industry as a 'cash cow' and cautioned against further tax hikes on airlines.