Jet2 adopts cautious approach to vaccine after reporting heavy loss

Jet2 has warned it will to continue to approach summer 2021 with caution – despite hopes of a Covid vaccine – as it reported a first-half pre-tax loss of almost £120 million.

The deficit compares to a profit of £337m in the first six months of 2019.

Revenue plunged 88% to £300m.

While welcoming reports that vaccines were progressing, the company said it would not get carried away.

It warned the ability to fly in the short term remain ‘uncertain’ given the current lockdown and said further losses, as is typical for the business, were expected in the second half.

Capacity for the winter has already been cut by 50%

Jet2 and Jet2 holidays chief executive Steve Heapy said last month that even if a vaccine is found, the long term health effects of such a vaccine may be hard to assess.

Executive chairman Philip Meeson described the period as one of "unprecedented operational and financial challenges".

"When the financial year began, very few people could have foreseen the prolonged impact of the pandemic," he said.

"Jet2 plc has adapted quickly to the challenges presented by taking considered, but decisive actions to bolster its liquidity, minimise losses and reduce cash burn.

"At this stage, we anticipate winter 20/21 seat capacity will be approximately 50% less than winter 19/20. And, with travel advice remaining uncertain, we expect forward bookings to continue to display a pronounced shorter lead time than in previous years. 

"Whilst the recent positive news about a potential vaccine was welcome, we continue our cautious approach to summer 2021. Current seat capacity is close to summer 2019 levels and we are on sale to all our popular……leisure destinations."

The airline and tour operator saw carryings fall from 10m to under 1m during the period, with load factors down from 93% to 69%, the result of ‘uncertainty created by the several changes in UK Government quarantine guidance’.

"Our summer flying programme has since concentrated on those routes where we can achieve a positive financial contribution," Meeson said. "Following the reimposition of quarantine restrictions for Mainland Spain, the Canary Islands and the Balearics in late July, we successfully re-focussed our programme to Eastern Mediterranean destinations, supported by our quick to market, flexible operating model.

Average flight-only ticket yield per passenger sector climbed 10% to £97.58, primarily due to a stronger mix of Eastern Mediterranean destinations.

The average price of a package holiday fell by 3% to £681 (2019: £702), reflecting the many special offers received from hoteliers which were passed onto our customers.

Meeson added that around 80% of its workforce had been furloughed as it battled the financial implications of Covid.