Travel group Jet2 said it expects to see a profit boost of up to 10% this year as more holidaymakers seek out winter sun as well as summer holidays.
But the Leeds Bradford Airport-based package holiday and flights business has warned that mounting cost pressures could put a squeeze on its margins in the future. The group issued a trading update for the year ending March 31 2025, saying the board expects to report a group profit before foreign exchange revaluation and taxation of between £560m and £570m, an 8% to 10% increase on the previous year.
It said its winter 2024/25 on sale capacity at 5.1m seats is 14% higher than last winter, and that more people are continuing to book last minute trips closer to departures, continuing a trend it saw in the summer. Jet2's capacity for summer 2025 is currently 8.5% higher than last summer, at 18.6m seats, with its new bases at Bournemouth and London Luton airports contributing around 4% of the growth.
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For trips leaving in April, May and June, package holiday customer numbers grew by 4%, while flight-only passengers increased by 19%. It said pricing “remains keen” with its package holiday product displaying “a modest average increase and flight‐only slightly positive”.
It said the group continues to experience inflationary input cost pressures ahead of the headline CPI (consumer price index) rate, in particular in cost areas of hotel accommodation, aircraft maintenance and general airport and Eurocontrol charges.
Jet2 is also expecting to take delivery of a further 14 new owned and leased CFM powered Airbus A321neo aircraft, increasing the fleet to 23 by the end of Summer 2025 – however, a number will be delayed from their agreed delivery dates, meaning it will incur additional operational costs to cover aircraft gaps in the peak summer flying programme. It said: “Nevertheless, we remain very pleased that the A321neo aircraft are already demonstrating their strategic value in terms of operating economics, reduced emissions and customer experience.”
Meanwhile, it said that it is facing other material cost increases, including increases in wage costs driven by National Living Wage rises and changes in Employer National Insurance – increases which will add £25m in annual costs, while the mandated increase to 2% of Sustainable Aviation Fuel (SAF) in the aircraft fuel mix will result in over £20m of incremental costs.
CEO Steve Heapy said: “We are very pleased with how the 2025 financial year is ending and our expected 8% - 10% profit growth, and given the limited forward visibility we are satisfied with early bookings for Summer 2025.
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“We continue to believe that our customers cherish their time away from our Rainy Island and want to be properly looked after throughout their holiday experience and we will continue to invest in our business to meet these expectations. However, we also recognise the current macro-economic conditions and the many demands placed on consumer discretionary incomes, which combined with the later booking profile and cost headwinds detailed, may mean profit margins in the year ahead come under some pressure.
"Nevertheless, our Customer First focus remains unwavering and as a much trusted holiday provider with an end-to-end customer care approach, we remain confident customers will continue to travel with us to the sun spots of the Mediterranean, the Canary Islands and to European Leisure Cities for many years to come.”