Investors in one of the UK’s biggest package holiday firms are hoping that the US-Iran peace deal will provide a further lift to summer bookings, as Jet2 prepares to unveil its full-year financial results on Wednesday.
The airline and holiday provider said it expected to report an operating profit of between £435 million and £440 million for the year to the end of March. But analysts say the real focus will be on current trading, particularly since President Donald Trump announced a peace deal with Iran last month.
“Jet2 investors await full-year results, hoping US-Iran peace deal has boosted summer bookings after war disruption.”
“Jet2’s commentary on current trading will be much more important than its full-year numbers to March 31,” said Russ Mould and Dan Coatsworth, analysts for AJ Bell. “Reports suggest holiday companies have enjoyed a strong bounce in trading since Donald Trump said a peace deal had been agreed with Iran.”
The optimism comes after a period of severe disruption for the travel industry. The effective closure of the Strait of Hormuz, which followed the outbreak of the Iran war, constrained shipping and reduced the global supply of jet fuel, forcing some airlines to cut summer schedules. Jet2, however, moved to reassure customers in May that its flying schedule would operate as normal over the summer and pledged not to introduce surcharges on any booked trips to cover higher costs.
Passenger bookings for the summer were already up in April compared with the previous year, for both package holidays and flights, raising hopes of a strong season ahead. But Jet2 also revealed that holidaymakers were increasingly booking trips closer to departure, a sign that nervousness about the Middle East conflict was prompting last-minute decisions. Since the peace deal, oil prices have returned to pre-war levels, and holiday companies have reported a surge in bookings to Cyprus and Turkey – two destinations Jet2 serves, along with others across the Mediterranean.
“We’ve already seen oil prices return to pre-Iran war levels and there are reports from various holiday companies of a surge in bookings to Cyprus and Turkey,” the AJ Bell analysts added.
Jet2 is also expanding its reach. Earlier this year it launched its first flights from a new base at London Gatwick airport, which it hopes will open up bookings to an additional 15 million potential customers. Investors will now be watching closely to see whether the peace deal and the Gatwick expansion can sustain the momentum through the rest of the summer season.