UK low-cost airline and travel firm Jet2 today tempered its profit outlook as visibility was muddled by travellers booking tickets closer to departure, sending its shares plummeting and dragging down those of its European peers.
The company now sees operating profit towards the lower-end of the expected range of £449-496m for the year ending March 2026, as seats for the summer and winter remain to be sold.
It reported operating profits of £446.5m last year.
Geopolitical disruptions and extreme weather have become pain points for travel firms, as vacationers are choosing to book hotels and flights closer to their departure dates to avoid unforeseen expenses.
British inflation also looks set to hit 4% this month, likely forcing Britons to curb discretionary spending like vacations.
Jet2 said today that average holiday prices are rising slightly, and the company plans to maintain "attractive pricing" to lure customers.
Jet2 added it was exercising "capacity discipline in a less certain consumer environment" as the later booking trend has become more pronounced since its July update, and its flight-only booking options have become "increasingly attractive".
The company, whose "Nothing beats a Jet2 holiday" advertisement has become a viral sensation on social media platforms, reduced its seats on sale to 5.6 million from 5.8 million for the upcoming winter season.
"Although we are currently operating in a difficult market, we have a proven business model," CEO Steve Heapy said in a statement.
Jet2 shares fell as much as 25% to 1,209 pence today. If losses hold, the stock will record its worst one-day percentage fall since May 2020.
"It appears to us that flight-only volumes and package holiday pricing are holding up, but at the expense of flight-only pricing and package holiday volume growth," analysts at Panmure Liberum said.
Jet2's European rivals Ryanair, EasyJet, Aer Lingus owner IAG, Wizz Air and TUI were also down between 2% and 4%.
Ryanair - Europe's largest low-cost carrier - said in August that bookings were strong, and the company kept its financial guidance unchanged.
