Jet2.com: increasing seasonality threatens FY2014 profit growth despite a strong first half
Jet2.com's parent, Dart Group PLC, enjoyed a strong increase in revenues and profit in the first half of the year to Mar-2014. Leisure-focused LCC Jet2.com is the group's principal business, although it also includes a tour operator and a distribution business. The airline saw very healthy growth in traffic and revenues, improved yields and a positive trend in ancillary revenues.
Nevertheless, the outlook for the second half, which covers the winter season, is for increased losses. Moreover, profit growth for the full year, while still likely, is not guaranteed. The seasonality in the group's business is growing, largely reflecting the wide gap in passenger demand for Jet2.com's leisure network between the summer and the winter.
Counter-seasonal business lines such as charter and cargo operations help to contain this. Nevertheless, comparison with its nearest peers, such as Monarch Airlines and Transavia, suggests that more could be done to narrow the seasonal gap. Any increase in the number of year-round destinations would probably also bring the challenge of increased competition with more cost-efficient LCCs
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