Jet2 has warned that its profits for the year to the end of March 2020 will be hit by capacity reductions for this summer.
In a trading update this morning, its parent company, Dart Group, said profits for the full year ending March 31 were ‘significantly’ ahead of current market expectations.
However, it said future capacity reductions for the 2020/21 financial year will result in a proportion of its existing hedging contracts becoming ineffective, thereby impacting those profits.
Until very recently, customer demand was consistently strong and in January and February bookings were well ahead of its 16% summer capacity increase, said Jet2, but it has seen demand weaken in recent weeks as the coronavirus spreads across Europe.
Bookings remain ahead of this time last year, but the company said: “Given the limited visibility on the impact of Covid-19, the Board is currently unable to determine how this will effect Group profit before foreign exchange revaluation and taxation for the financial year ending 31 March 2021.
“We continue to monitor the situation carefully and are taking proportionate actions to underpin the stability of the business, which includes reducing capacity on some routes where warranted, but always keeping at front of mind the need to ensure our customers experience the holidays they deserve.”