Jet2 forecasts profits to rise in 2025 but warns of headwinds as costs increase

Jet2, the UK’s second-largest airline in terms of passengers carried annually, has raised its profit projections for 2025 although has also warned that rising costs and delays to the delivery of new aircraft could place pressure on its future profitability. The Leeds, UK-based Jet2 Group includes leisure airline Jet2.com plus its associated in-house inclusive tour operator, Jet2 Holidays.

In a financial update statement issued on February 19, 2025, the company confirmed that an increasing trend for late booking for summer holidays in 2025 along with upward pressure on certain cost parameters were of concern for the airline in a market where margins are traditionally slim and competition in the European leisure market is increasing, particularly from low-cost airlines such as easyJet and Ryanair.

Jet2, as the UK’s largest inclusive tour operator, said it had raised its profit projections for 2025 by up to 10% to reach between £560 to £570 million ($711 million to $724 million) for its fiscal year which ends at the end of March 2025. The increase is being driven in part by the launch of two new operating bases in the past twelve months, with aircraft and crews being placed at Bournemouth Airport (BOH) in the south of England as well as at London-Luton Airport (LTN).

Bradley Caslin / ShutterstockWith the addition of the new bases plus the delivery of new aircraft to the airline’s fleet, the company has already calculated that its 2025 summer capacity will equate to an 8.5% increase over 2023 with 18.6 million seats on offer across its network. The two new bases alone will contribute over 700,000 of those seats.

Challenges ahead

Although on first reading, these numbers all look positive for the Jet2 Group, the company is predicting the possibility of a bumpy ride in the coming months as a perfect storm of economic and operational considerations come into play. The airline said that while deliveries of its new Airbus A321neo aircraft are continuing which will bring the carrier’s fleet of the type to 23 by the peak of summer 2025, it faces delays to the delivery of 14 of these new airplanes.

“Unfortunately, a number of these aircraft will be delayed from their agreed delivery dates and consequently we expect to incur additional operational costs to cover aircraft gaps in the peak summer flying program,” said a company statement. “Nevertheless, we remain very pleased that the A321neo aircraft are already demonstrating their strategic value in terms of operating economics, reduced emissions, and customer experience,” the company added.

According to Planespotters.net, the company’s current fleet consists of 100 Boeing 737s plus 18 Airbus A321s, with a single wet-leased A330-200.  

Markus Mainka / ShutterstockThe airline believes that the ongoing strain on UK household budgets caused by wayward inflation figures and the rising cost of living were likely to continue impacting the airline’s financial performance, as customers held out for late booking deals. The airline added, “To date, we are continuing to see a later booking profile. For the combined departure months of April, May, and June [2025], total forward bookings are up by approximately 7% with the overall average load factor for our existing bases broadly flat. 

“Bookings for our two new bases are encouraging, although the average load factor at London Luton is materially lower than that of existing bases due to it only going on sale when operations were announced in November 2024. For the same departure months, package holiday customers have increased by 4%, while flight-only passengers have grown by 19%. Pricing remains keen with our package holiday product displaying a modest average increase and flight‐only slightly positive.”

Markus Mainka / ShutterstockIn terms of macroeconomics, Jet2 warned that it faces “material cost increases” due to increased UK employer National Insurance contributions introduced by the UK Government in late 2024, alongside rises in the National Living Wage, which have combined to result in a previously announced £25 million hit.

Touching on direct operating costs, the airline said that the UK Government’s mandated increase to 2% of sustainable aviation fuel (SAF) will also result in more than £20 million of incremental costs for the carrier, owing to the significant price differential between SAF and conventional jet fuel. Elsewhere, large cost increases in hotel accommodation, aircraft maintenance, general airport handling fees, and Eurocontrol charges will all hurt the airline, it added.

Outlook for 2025

Jet2’s Chief Executive Steve Heapy summarised the airline group’s position, warning that although the overall trend for profitability is upward, the next twelve months will not be without its challenges.

“We are very pleased with how the 2025 financial year is ending and our expected 8%-10% profit growth, and given the limited forward visibility, we are satisfied with early bookings for summer 2025,” said Heapy. “We continue to believe that our customers cherish their time away from our rainy island and want to be properly looked after throughout their holiday experience and we will continue to invest in our business to meet these expectations.”

Bradley Caslin / Shutterstock“However, we also recognize the current macroeconomic conditions, and the many demands placed on consumer discretionary incomes, which combined with the later booking profile and cost headwinds detailed, may mean profit margins in the year ahead come under some pressure. 

“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 sunspots of the Mediterranean, the Canary Islands, and to European leisure cities for many years to come,” Heapy concluded.

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