Jet2 recorded a nearly \u00a3400m boost from the rising price of jet fuel which caused widespread fear that summer holidays could be cancelled and airlines could go bust.<\/p>\n
The package holiday provider<\/a> revealed that it defied the travel chaos caused by the Middle East conflict to instead take a \u00a3388m balance sheet boost from rising jet fuel prices.<\/p>\n Because the company had already locked in low fuel prices with its suppliers, the rising market cost of fuel meant that the value of its fuel contracts soared during the conflict.<\/p>\n The AIM-listed firm said<\/a> an extra \u00a3388m in income was \u201cprimarily due to favourable fair value movements in jet fuel derivatives at the balance sheet date as market pricing increased following the escalation of conflict in the Middle East\u201d.\u00a0<\/p>\n The UK had faced<\/a> warnings earlier this year that it was the \u201cmost exposed\u201d to a jet fuel crisis, prompting ministers to scramble<\/a> to ensure airlines\u2019 access to fuel and to suspend airport capacity rules.<\/p>\n Jet2 sought to defy the gloom that has surrounded travel firms in its annual accounts published on Wednesday, claiming that recent \u201creduced geopolitical uncertainty\u201d has driven \u201cstrong booking momentum\u201d in recent weeks.<\/p>\n The firm\u2019s share price jumped by nine per cent to 1,486p on Wednesday\u2019s market open, leaving the stock up five per cent in the year so far.<\/p>\n \u2018Don\u2019t treat airline industry as cash cow\u2019<\/p>\n Jet2 chief executive Steve Heapy warned Andy Burnham against treating the aviation industry as a \u201ccash cow\u201d after revealing \u00a350m in extra tax costs.<\/p>\n Speaking to shareholders on Wednesday morning, he urged future Prime Ministers that hiking taxes on airlines \u201cincreases the price of flying\u201d for Brits, as Burnham looks set to enter Downing Street later this month.<\/p>\n Heapy said: \u201cDon\u2019t treat the aviation or holiday industry as a cash cow, because taxes increase the price of flying.<\/p>\n \u201cI would caution against continuing the policy of taxing the industry. Last year, as you\u2019ve seen from the results, we absorbed 50 million pounds of additional regulatory costs that were imposed on us. I think you know enough is enough.\u201d<\/p>\n The firm unveiled a new \u00a3250m share buyback which it said reflects its \u201cstrong liquidity, confidence in the medium-term outlook and disciplined approach to capital allocation\u201d.<\/p>\n But Jet2 conceded that the travel uncertainty caused by the Iran war is causing holidaymakers to book more last-minute than usual.\u00a0<\/p>\n The airline said that a 67 per cent decline in its cash inflow to \u00a377m in the year to the end of March was due to \u201ccustomers delaying their holiday bookings following the start of the conflict\u201d.\u00a0<\/p>\n Jet2 saw revenue jump by four per cent in the period to \u00a37.5bn but profit before tax slipped by seven per cent to \u00a3551m, owing to lower income earned on its cash deposits.\u00a0<\/p>\n The holiday provider upped its seat capacity by eight per cent to 24m in the year to March and flew 20.8m passengers, five per cent more than the previous year.<\/p>\n Jet2 expands \u2018beyond Northern roots\u2019<\/p>\n In March, the firm opened up a six-aircraft operation at Gatwick, which it said marked a \u201cpivotal movement in our growth journey as we continue to advance beyond our established Northern roots\u201d.<\/p>\n The company now operates within a 90-minute drive of more than 90 per cent of the UK\u2019s population, it said.<\/p>\n Richard Hunter, head of markets at Interactive Investor, said that Jet2 has proved \u201cit is no minnow. It is the third largest airline in the UK behind British Airways and easyJet, ahead of TUI and Virgin Atlantic.\u201d<\/p>\n The firm\u2019s \u00a36.2bn market cap makes it the second-largest company on the AIM market and means it would \u201ccomfortably\u201d enter the upper end of the FTSE 250 if it made a switch, Hunter added.<\/p>\n Heapy said: \u201cWe took more customers on holiday than ever before, delivered record revenue and achieved a resilient operating profit performance even after absorbing Gatwick start-up investment and wider industry cost pressures.\u201d<\/p>\n