By Nithyashree R B and Yadarisa Shabong
(Reuters) -Jet2 notched up a record number of passengers over the summer as the British low-cost airline and travel group expands its operations and reaps the benefits of its “Nothing beats a Jet2holiday” advertising campaign.
The Leeds-based firm reported a 2% rise in half-yearly operating profit, despite higher costs and investments into new bases at Bournemouth and London Luton, and announced a 100 million pound ($131 million) share buyback, sending its shares 5% higher on Wednesday.
The airline’s advertising campaign, featuring Jess Glynne’s ‘Hold My Hand’ track, has been “hugely beneficial for the brand,” CEO Steve Heapy told journalists on Wednesday.
The company reported a record 14.1 million passengers in the six months to Sep. 30, a 6% increase from a year earlier.
Membership of its myJet2 bookings and loyalty portal surged 62% in the past year, exceeding 8.4 million, the company reported.
Jet2 plans to start flying from London’s second-largest airport, Gatwick, from March and expects losses in the second half due to promotional and start-up costs, as well as increased aircraft and marketing, as it prepares for next summer.
However, it expects annual operating profit to be in line with market expectations.
WARY OF UPCOMING UK BUDGET
Amid uncertainty around the upcoming UK budget, CEO Heapy urged the government “not to continue using the airline and holiday industry as a ‘cash cow’,” as it tries to plug the gap in government finances.
Heapy said any additional taxation on the airline and the holiday industry will be “inevitably passed on to customers, and that will put prices up.”
Winter on-sale seat capacity was 7.7% higher than last year at 5.5 million seats, the company said, adding that late bookings continued to be a challenge for the group.
($1 = 0.7624 pounds)
(Reporting by Nithyashree R B, Pushkala Aripaka and Yadarisa Shabong in Bengaluru; Editing by Ronojoy Mazumdar, Elaine Hardcastle)
