Jet2: Budget airline warns of £45m hit from tax hikes and green levies

Budget airline Jet2 has reported a boost in profit before tax but warned margins may come under pressure in the near future due to a raft of cost pressures.

Jet2 expects to report profit before tax of between £560m and £570m for 2024, an eight to 10 per cent increase on the prior year.

However, the budget airline warned that its profit margins may be pressured this year due to “current macro-economic conditions and the many demands placed on consumer discretionary incomes.”

Changes to national insurance contributions (NICs) will also add £25m to Jet2’s yearly wage cost, while the mandated increase to two per cent of Sustainable Aviation Fuel (SAF) in the aircraft fuel mix will add £20m in costs.

The company told markets this morning that Package Holiday customers increased by four per cent during the year, while Flight-Only passengers grew by 19 per cent.

“We are very pleased with how the 2025 financial year is ending… given the limited forward visibility we are satisfied with early bookings for summer 2025,” CEO Steve Heapy said.

“We continue to believe that customers… want to be properly looked after throughout their holiday experience and we will continue to invest in our business to meet these expectations,” he added.

Jet2 said that it continued to experience input cost pressures exceeding the headline CPI inflation rate, in particular in the areas of hotel accommodation and aircraft maintenance.

It expects to add 14 Airbus A321neo aircraft to its fleet by the end of summer 2025, increasing its total to 23.

However, the company cautioned that “a number of these aircraft will be delayed”, and it expects “additional operational costs” to cover aircraft gaps in the peak summer flying program.

“Nevertheless, our Customer First focus remains unwavering and as a much trusted holiday provider with an end-to-end customer care approach, we remain confident customers will continue to travel with us to the sun spots of the Mediterranean, the Canary Islands and to European Leisure Cities for many years to come,” Heapy said.