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Jet2 shares tumbled more than 20 per cent on Thursday after the UK travel operator warned that profits would be at the low end of analysts’ forecasts, as customers cut back on holidays.
Blaming a “less certain consumer environment”, Jet2 said it still had much of its winter seating capacity left to sell and only “limited visibility” over bookings.
As a result, Leeds-based Jet2, which flies to 75 destinations, said it had cut the number of seats on sale for the winter from 5.8mn to 5.6mn.
The company’s shares fell as much as 24 per cent at the open in London before recovering to trade down 13 per cent.
The warning marks a significant deterioration from early July, when Jet2 reported record profits and passenger numbers. At the time, chief executive Steve Heapy told the Financial Times that the urge to “escape” from Britain had boosted business.
“I spend 50 weeks a year in this country and I want to escape it. People desperately want to get away . . . from their day-to-day lives,” Heapy said.
In its latest update, Jet2 said its full-year earnings before interest and tax would be at the lower end of the £449mn to £496mn expected by analysts.
Alex Paterson, an analyst at Peel Hunt, said Jet2 had been hit by budget-conscious consumers “scaling back” their holiday plans.
“We’ve had incredibly good summer weather and that has meant there have been more domestic holidays,” he said. “We’ve also had unrelentingly negative economic news coverage in the UK, and that has put some people off booking an international trip.”
The warning from Jet2 hit shares of companies across the travel sector, with Tui, Europe’s largest travel operator, and London-listed easyJet both down more than 3 per cent. Shares in International Airlines Group, the owner of British Airways, dropped 1.8 per cent.
US hotel chains, including Marriott and Hyatt, and airline Southwest have also warned that consumers are reining in spending and delaying bookings. The companies said the trend has made it harder to forecast earnings.
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