Jet2 falls to £374m loss after handing customers £1.4bn in refunds

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A Jet2 Boeing 737
The low-cost carrier, which sells package holidays and flights to European leisure destinations, resumed flights to green-listed countries on 1 July and will only start flights to amber destinations after 19 July. Photo: Robert Smith/MI News/NurPhoto via Getty Images

The package holiday firm Jet2 (JET2.L) swung to a £374m ($514) loss from a £264m profit the year before, as the coronavirus pandemic wiped out 90% of the company’s passenger numbers.

The firm said it suffered “a period of unparalleled operational and financial challenges” in the 12 months to the end of March, as it flew just 1.3 million passengers, down from the 14.6 million a year ago.

A number of national lockdowns and travel restrictions across the globe also meant that Jet2 handed out £1.4bn in customer refunds since the start of the pandemic. But in its trading update on Thursday Jet2 said its liquidity remained strong due to the additional £1bn funding it raised over the last year.

The low-cost carrier, which sells package holidays and flights to European leisure destinations, resumed flights to green-listed countries on 1 July and will only start flights to amber destinations after 19 July.

It warned that it continues to have “limited visibility” on the current summer travel season but said it was optimistic that 2022 would be a "considerable improvement" on the previous two years. Bookings are already showing a higher proportion of higher margin package holidays in the mix, it said.

The holiday provider added that the vaccine rollout programme and the expansion of the UK government’s "green watch list" was a "step in the right direction".

Shares were 1.2% lower in London on the back of the news.

Shares slipped on Thursday. Chart: Yahoo Finance
Shares slipped on Thursday. Chart: Yahoo Finance

“With the past year being one of the hardest for the airline industry, it is no wonder that Jet2 has reported a mixed set of results today,” said Neil Shah, director of Research Edison Group.

“With the majority of the UK anticipating positive news regarding foreign travel in the near future, Jet2, like many other airlines, will be looking to capitalise.

“However, it still looks as if there may be some uncertainty regarding government restrictions, and a complete return to normality could be some way away,” he said.

Read more: Jet2 bemoans 'lack of clarity' on travel plans as losses hit

Grant Shapps, UK transport secretary, is set to reveal details of a plan to allow fully vaccinated Britons to return to England without quarantining, opening up travel for millions.

Britain’s traffic-light system currently assesses countries as “green”, “amber” or “red” based on vaccination rates, infection levels, prevalence of variants of concern and capacity to genome sequence the virus.

Holidaymakers are able to travel to “green” destinations without having to quarantine on their return, while amber destinations require travellers to quarantine at home for 10 days on their return with two PCR tests on days two and eight.

People travelling to “red countries” must take three tests and cannot pay for a separate test to get out of quarantine early. They must also quarantine for 10 days in a hotel at a cost of around £1,750 per person.

The traffic-light system only applies to people in England, as Scotland, Wales and Northern Ireland set their own rules.

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