Will Jet2’s share price continue to fly?

Jet2 investors will be hoping to see further growth from the low-cost airline this week after a bumper year in which its share price has risen by over a fifth.

Jet2’s stock, up 23.7 per cent this year to date, has benefitted from booming demand for travel across Europe, while also outperforming rivals such as Ryanair and Tui.

The UK’s third-largest airline hauled in over £6bn in revenue in the year ending March and carried more than 17m passengers, a nine per cent year-on-year rise.

It brought operating profit at the firm past the half a billion mark, leading the board to hike dividends by 34 per cent on 2023.

While strong travel demand has benefited the entire aviation sector, Jet2 has also cashed in on its cheap package holiday division.

That performance has helped offset falling air fares, which caused a sell-off in London-listed airline stocks in July.

In its last half-year report, more than three quarters of Jet2’s revenue came from package holidays, according to data compiled by Bloomberg.

Analysts say they expect this week’s numbers to show continued growth in its package holiday division over the summer.

“While some of this is a function of pricing trends ahead of the key summer season – we believe that Jet2 is well placed within the holiday space as a package holiday operator vs a pure-play airline,” HSBC analysts said in a July note.

“Similar commentary from travel agents, SME operators and market data suggests that package holiday demand remains resilient and that pricing issues are a function of airline overcapacity,” they added.

Thursday’s results cover the key summer period and the airline has already said it had experienced a surge in late bookings across July, August and September.

In a further boost for investors, the group said in September forward-looking bookings over the Winter months looked “encouraging,” with an average load factor 0.8 per cent of Winter last year.