Jet2 plc

Good morning everyone and thank you for joining us. I'm Steve Heapy, Chief Executive Officer of Jet2 plc and I'm pleased to be taking you through our performance for the year-ended 31st of March 2026, together with the growth strategy that gives us confidence for the years ahead. I'm joined today by Gary Brown, our Chief Financial Officer, who will obviously talk you through the numbers. But before that, I will start with the key highlights and the strategic context. Gary will then take you through the financial results in more detail and I'll return to cover our growth plans, current trading and outlook before we open the line for questions. In simple terms, this has been another strong year for Jet2. We have grown passenger numbers, delivered record revenue, maintained a robust operating performance despite clear cost headwinds and continued to return meaningful capital to shareholders. Let me begin with the headline performance. We delivered another year of record passenger numbers and record revenue. Operating profit remained resilient, even after absorbing Gatwick startup investment costs and wider industry cost pressures, including incremental SAF premiums and increases in employment tax. The balance sheet remains a real pillar of strength for the business. We ended the year March 2026 with over 2 billion of net cash, giving us the flexibility to invest for growth, protect the customer proposition and deliver attractive shareholder value. During the year we flew over 20 million passengers, that's 5% more than last year with most of that growth delivered by our newer bases at London Luton and Bournemouth. We also returned £363 million to shareholders through share buybacks and dividends more than ever before and today We have launched a further £250 million share buyback programme which we plan to complete by 31st May 2027. That combination of growth, resilience, cash generation and disciplined capital allocation is of paramount importance. It shows that JET2 is not just growing for the sake of growth. We are growing in a way that is controlled, customer led and focused on long term shareholder value. I'll now hand over to Gary Brown, who will take you through the financial results. I'll then come back and talk about the strategy and outlook.

Thanks, Steve. Good morning, everyone. I'm Gary Brown. I'm Group CFO at Jet2, and I'm pleased to present our financial results for the year ended 31st of March, 2026. Starting with our key performance indicators on slide five. Overall, the group delivered a strong revenue and resilient operating profit performance this year with our KPIs illustrating how our flexible, fully integrated operating model is capable of adapting to changing consumer trends. The KPIs also demonstrate our clear focus on optimising profitability through a combination of volume, pricing and product mix. We've kept our focus on growing the business this year, particularly as we expand further into the south of England. Across all our UK bases, we added 8% more seat capacity, with our new bases at Bournemouth and Luton making up approximately half of that increase. Importantly, more people are choosing Jet2 than ever before, with over a million additional passengers this year. Demand for our flight-only product was strong again, with growth of 15% to 7.64 million passengers, demonstrating the strength and adaptability of our business model, particularly in a market where customers were booking closer to departure and seeking those last-minute deals. We've continually stressed that both our products are of vital importance and it's great to see customers recognising the clear value that our flight only offering brings. Friendly flight times, an industry leader for not cancelling flights and with the added benefit of our red team of customer helpers providing that outstanding customer first service. That said, we know customers still appreciate the convenience and flexibility offered by our package holiday product as customer volumes grew by 1% to a record 6.62 million. Package holiday pricing remained resilient, up 3%, of which around 1% came from more customers choosing 4- and 5-star hotels than last year, alongside the partial recovery of supplier-led cost inflation. Flight-only net ticket yield was down 7% as we chose to invest in price by reallocating marketing monies to support load factor and optimise overall profitability. Pleasingly, we also generated 4% more non-ticket revenue per passenger, primarily driven by higher in-flight spend per passenger, following the successful launch of a refreshed product range, together with continued strong onboard stock availability, both supported by our Retail Operations Centre. Turning to our financial performance on slide 6. We delivered record revenue this year, up 4.3% driven by the growth in passenger numbers, the combined yields and some mix, with package holidays representing approximately 80% of the overall revenue. Our underlying cost base, excluding London Gatwick startup investment, was well controlled and was up 4.5% and only slightly ahead of revenue growth. The main drivers of this growth were hotel accommodation, which makes up 45% of our cost base, was up just over 6.5%, reflecting supply-led inflation and more customers choosing four- and five-star hotels. Landing, handling, and third-party navigation costs, which are around 8.5% of our cost base, increased by 8.6%. The growth above flying activity reflected a 4% increase in rates across airport charges, handling fees and Eurocontrol flying fees. Offsetting this, fuel costs, which represent approximately 10% of our cost base, reduced by just over 1%, benefiting from lower fuel swap rates and unit cost efficiencies from our growing A321neo fleet. These benefits enabled us to mitigate an incremental 32 million of SAF premiums incurred this year, resulting from increased UK and EU SAF mandates. In addition, marketing costs fell by 9% as we chose to invest marketing monies into pricing to attract later bookings in a competitive marketplace. This helped support our average load factor and optimise our overall profitability. We also absorbed an additional £18 million of costs from changes to the National Living Wage and Employer National Insurance. In addition to our underlying cost base, we incurred £11 million of start-up investment costs ahead of the operational launch of our new base at Gatwick in late March. After these factors, pleasingly, our operating profit margin remained resilient at 5.9%, whilst our basic earnings per share was stable at 211.2 pence. Our return on capital employed remained healthy at 14.4% despite continuing to invest in growing our A321 neo fleet which are obviously long term cash generating assets. Moving to slide 7 and our cash generation, as you can see we continue to deliver significant operating and free cash flows giving us the capacity to invest in value accretive opportunities as appropriate. Our 2026 operating cash flow of £900 million was slightly lower than the prior year as customers delayed their bookings in response to the conflict in the Middle East. We spent £391 million on capital expenditure as we invested in our A321neo fleet and also completed construction of our second maintenance hangar at Manchester airport last summer which has increased our overall in-house maintenance capacity by some 50%. As a result, our free cash flow was £495 million, meaning we have generated £2.6 billion of free cash flow since the end of the Covid pandemic, which gives us confidence in our ability to support our strategic capital allocation priorities moving forward. Our Jolko financing increased by £238 million to support the deliveries of our A321 Neo fleet, whilst borrowing repayments were lower this year at £248 million, driven by the one-off early repayment of the convertible bond last year. Importantly, the cash generation also supported shareholder returns, with 22.1 million shares repurchased during the year through two share buyback programmes, the second of which completed in early May 2026. Look into our balance sheet on slide 8. We have one of the most robust balance sheets in the sector, with access to ample liquidity, which we believe is important in a fast-moving, capital-intensive industry such as ours. We took delivery of 10 A321neo aircraft this year, 6 from our long-term aircraft order with Airbus and 4 on 12-year operating leases to fill near-term gaps in the delivery profile. Our cost of debt remains low, helped by our decision to repay four of our Boeing aircraft loans early, these loans being more expensive than the financing currently available to us in the Jolco market. We also returned £363 million to shareholders this year, primarily through the two share buyback programmes, plus dividends. Overall we remain in a strong cash position with total cash up 4% year on year of which £1.2 billion is our own cash excluding customer advances plus our £500 million revolving credit facility which remains undrawn. We also took the opportunity to extend this facility by year to October 2030 with an option to extend for a further year if appropriate. Finally, onto our medium term targets on slide 9. We first talked through these principles at our interim results last November. Whilst we don't expect to meet these targets overnight, we believe they provide a very good indication of how our capital allocation is expected to evolve over the coming years. We believe a target of two times net debt to EBITDA on an own cash basis strikes the right balance between adequately protecting the business and using a sensible level of leverage to support returns. We currently have plenty of headroom against that target, but as we finance a higher proportion of our new aircraft deliveries, we anticipate moving to two times over the next three to five years. We also believe holding own cash of between 600 million and 700 million at our year end, which is the low point in the cash cycle, together with an undrawn revolving credit facility of £500 million gives us the right level of headroom to deal with any unexpected events. As at today we don't expect this target to increase as the business grows and believe it remains the right level for us. We are firmly committed to our Airbus delivery pipeline with a further 124 aircraft scheduled for delivery by 2035 and on that basis our capital expenditure will average towards £900 million over the next four years. We intend to fund our A321 NEO deliveries mainly through Jolco financing, particularly in the short to medium term, as we look to take advantage of the competitive rates currently available. Across the full order, we plan to finance approximately 50% of the deliveries, very much in line with our business philosophy of owning a healthy proportion of these valuable cash generating capital assets, which we intend to fly through to end of life. Our capital allocation principles remain consistent. Capital control to invest in and maximise the returns of the existing business in an ever-changing consumer landscape, keeping our balance sheet in good shape, and shareholder returns subject to ongoing satisfactory financial performance. As Steve highlighted earlier, in total we return £363 million to shareholders this year and approximately 15% of the current market capitalisation. In part, this has helped support basic earnings per share growth of over 120% since 2019, together with an increase in profit after tax of some 190% over the same period. And as you've heard, we've announced a new share buyback programme today which will see us return a further £250 million to shareholders by the end of May 2027, in addition to our usual dividend payments. A further sign of our confidence in the medium term outlook and underlying our disciplined approach to capital allocation. I'll now hand back to Steve who will take you through the remainder of the presentation.

Thank you Gary. I'll now pick up with our growth strategy and the outlook. Our long term strategy remains unchanged and very clear to be the UK's leading and best leisure travel business. That's not just a strap line, it guides how we make decisions every day. We focus on customer driven flight schedules to popular leisure destinations across the Mediterranean, the Canary Islands and European leisure cities. We retain control of our seat supply. We build long term hotel partnerships and we stay absolutely focused on our customer first approach. That proposition continues to resonate strongly with customers. We are a which recommended provider in seven categories. Our net promoter scores are in the mid 60s and our customer satisfaction remains very high at 92%. Additionally, our flight cancellation rates is industry leading at just 0.06%. We are also continuing to invest for sustainable long term growth. We will have 31 Airbus A321neo aircraft in the fleet for summer 2026 and our second engineering hangar at Manchester is now fully operational, increasing our in-house maintenance capacity by 50%. And, of course, none of this happens without our colleagues. They remain central to everything we do. We continue to attract, develop and retain talented people who will deliver our award-winning customer service day in, day out, with 78% of colleagues saying they're proud to work for Jet2. In order to deliver that strategy, we focus on four key levers which underpin our profitable multi-year growth agenda. First, fleet investment. We have committed orders for 155 Airbus A321neo aircraft through to 2035. That gives us certainty of supply, meaningful unit cost efficiencies and a strong platform for responsible, profitable growth. Secondly, accelerating growth in the south of England. We have launched three new bases in the last 18 months and a significant opportunity to build our presence in a market where Jet2 remains under-penetrated compared with our more mature bases. We continue investing to deepen brand awareness and understanding to capture this fantastic opportunity. Third, continuing to do what we do best, delivering VIP customer service that drives loyalty, retention and advocacy, and it helps bring new customers to the Jet2 brand. and fourth, enhancing our marketing capability through data and technology. Working with Adobe, we're building a more advanced marketing platform to create a much more personalized booking experience and improve efficiency through a lower cost of acquisition. All of these levers are supported by our strong liquidity position and our disciplined approach to capital allocation. The Airbus A321neo aircraft is central to our growth and cost efficiencies plan. By securing these aircraft during the Covid period, we benefited from highly attractive commercial terms ahead of the inflationary environment that followed. For summer 2026 we will operate 31 A321neo aircraft out of a total fleet of 139 aircraft, with the fleet expected to grow to around 162 aircraft by 2032, supported by flexibility around the retirement of our Boeing 737-800s. This means that the fleet size could be higher or lower than this number depending on the economic environment etc. This aircraft brings very clear benefits 232 seats, which is 23% more seats than the Boeing 737-800 20% more fuel efficient on a per seat basis and around 50% quieter which makes it a very attractive aircraft. That translates into an overall cost saving of around £10 per seat versus the Boeing 737-800. By 2030 we expect the NEO fleet to deliver annual cost efficiencies of around £190 million helping offset the incremental cost headwinds from UK and EU SAF mandates Rising Carbon Costs and Inefficient UK and European Airspace Management Turning now to Gatwick and the south of England. Our launch at Gatwick is a major strategic milestone. It is a once in a generation opportunity to accelerate our growth and establish a strong foothold in the south of England. Gatwick is the UK's leading departure airport for beach, holidays and city leisure breaks and is a perfect fit for Jet2 and our customer base. It gives us access to a catchment of more than 50 million people within 60 minutes by road or rail and it is a natural fit for Jet 2 given its strength in beach holidays and city leisure breaks. For summer 26 we currently have six aircraft in operation at Gatwick operating 79 flights a week to 29 popular leisure destinations across Europe with a further aircraft plan for summer 2027. The early performance has been pleasing. Forward bookings show a higher package holiday mix than we initially expected and average lodge factor is in line with our other London bases despite going on sale later in the booking cycle. More broadly, we believe there is a compelling opportunity to increase our market share across the south of England through our bases at Bournemouth, Bristol, Luton, Stansted and Gatwick. Our household penetration in this region is currently less than 5% compared with over 13% across our established bases in the Midlands, the north of England, Scotland and Northern Ireland. Yet the UK population is split broadly 50-50 between these two areas. That shows the scale of the opportunity. We know the model works. We've built a market leading position in our established bases by developing and protecting the brand, delivering outstanding customer service and creating loyal customers who choose to travel with us year after year. Our task now is to replicate that success in the south. Brand awareness in the south of England is also significantly below that of our established markets. We want to change this with targeted, personalised customer activity, greater media weighting and a disciplined regional focus. By continuing to grow our presence in the south of England, while maintaining the strength of our established base network, we see a clear opportunity to further enhance Jet2's position as the UK's leading leisure travel brand. Customer choice is another important part of our advantage. Our fully integrated model allows us to offer customers exceptional choice and the flexibility to create the holiday that is right for them. We offer an extensive network of flights and hotels across Europe and North Africa, serving popular beach destinations and city leisure breaks. We continue to broaden the programme with destinations and holiday experiences that reflect changing customer preferences and emerging travel trends. North Africa is a good example. Our programmes in Egypt and Tunisia build on the success of Morocco and give customers access to an even wider range of high quality holiday destinations at great value for money. Across the business our product range now includes over 5,500 2-5 star hotels and more than 3,750 villas across 850 resorts. We are also expanding experiential travel through our partnership with Musement and our new EuroCamp partnership will add 66 quality holiday parks across France, Italy, Croatia and Spain. The breadth of that choice reinforces our position as the UK's leading leisure travel business and supports our long-term growth ambitions. The market backdrop also remains supportive. Around a third of surveyed holidaymakers expect to take more overseas holidays over the next 12 months and that interest in package holidays remains ahead of the levels seen at the end of 2025. Independent analysis from Mintel supports this positive outlook showing growing interest in beach holidays alongside an increase in the number of package holidays taken by UK residents in recent years. Jet2 is exceptionally well placed to benefit from those trends. We have one of the strongest and most trusted brands in UK leisure travel with the highest brand awareness in the sector. That helps keep us front of mind when customers are planning their well-earned getaways. But the real differentiator is service. We continue to lead the industry on customer satisfaction, loyalty and repeat bookings because our customer service is consistent from start to finish. From the moment customers book, through the airport with support from our RED team, on board with our cabin crew and in resort with our RED team of customer helpers. Customers tell us that they value that satisfaction scores are over 90%, repeat booking rates are very strong at 61% for Jet2 holidays and 55% for Jet2.com and our industry leading net promoter score of 65 is 45 points higher than the European airline average. That gives us confidence in the strength of our brands, our competitive position and our ability to deliver sustainable long-term growth. And great customer service breeds loyalty. We are focused on driving customer loyalty, building consumer advocacy and reinforcing our position as the first choice of company for holiday customers across the UK. 43% of our direct bookings came from customers who have travelled with us more than six times and these bookings have increased at a 23% compound annual growth rate over the last three years. We build that loyalty through relevant communication, tailored content and above all else the consistent delivery of VIP customer service. As customers come back more often, we deepen those relationships with exclusive benefits and recognition, helping to convert first-time bookers into loyal customers who choose us first and recommend us to others. That matters commercially because loyal customers have a higher lifetime value, book more frequently and reduce acquisition costs. We're also using data and technology to deepen those customer relationships. Data and technology will help us go further. Our marketing customer database now stands at 11.2 million customers and over half have previously booked or travelled with us in the last 25 months. Our MyJet 2 members have increased by 45% over the past 12 months to more than 9 million. Every additional recognised and permissioned member gives us deeper customer insights and a richer data asset, enabling improved personalisation, stronger loyalty and better repeat booking performance. Working with Adobe, we are using that data to deliver more personalized marketing, improve efficiency, and strengthen customer engagement. Over time, that creates further opportunities in media and partnerships while helping us attract and retain customers more efficiently. Turning to current trading, bookings to date for summer 2026 are encouraging. As you would expect, the conflict in the Middle East has influenced customer booking behaviour, with some customers choosing to book even closer to departure than usual, or choosing a destination different from their originally intended destination. However, demand for our products remains resilient. The combined booked average load factor for the first four months of the year is currently 1.2 percentage points ahead of the prior year. As we said in our April trading update, we are continuing to invest in load factor through attractive pricing to take advantage of strong late booking momentum. Gatwick is also performing well. The package holiday mix is stronger than expected and we now plan to operate seven aircraft at the base in summer 2027 as we continue to execute our strategic growth plans in the south of England. Importantly, we also have a high degree of cost certainty, having hedged 90% of our full year jet fuel requirement at an average price of $743 per tonne, along with 85% of our FX requirements. Stepping back, Jet2 is a business with strong fundamentals, a clearly differentiated business model, a compelling product proposition, strong customer loyalty and a brand built on trusted award-winning VIP customer first service. As usual we will issue a further update on peak summer trading at our AGM which this year will be held in Leeds on the 3rd of September. Let me close by bringing this together. We remain confident in Jet2's ability to deliver sustained profitable growth through our differentiated fully integrated business model. We have the right fleet to support our long term growth plans with the A321neo unlocking significant cost efficiencies and giving us a strong platform for growth. We have a clear opportunity to expand in the under-penetrated south of England, including through Gatwick, where early performance is encouraging. We have a customer proposition that is trusted, differentiated and consistently well rated by customers, underpinned by our award-winning VIP service. We are building deeper customer relationships through loyalty, data and technology, which should support better retention, more efficient marketing and a higher lifetime value. And we have a strong balance sheet that allows us to invest in strategic opportunities whilst continuing to return capital to shareholders. That is why we believe JET2 has a clear competitive advantage and a strong platform for long-term, sustainable and profitable growth. Thank you for listening. Gary and I will now be pleased to take your questions.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. We will now take our first question from Harry Goers of JPMorgan. Your line is open, please go ahead.

Yeah, morning everyone. Thank you for taking the questions. I've got a couple of questions. The first one, clearly there's been some better bookings momentum post the Middle East and some of those volume gaps look like they're closing. But I wanted to know how aggressively are you having to stimulate on price in the late Mark or the close in bookings to get the volumes through. So any numbers you could potentially give this on the pricing very close to departure. And then second question, maybe one for Gary, but what do we expect for supplier led cost inflation in across the March 27 year? And how much of that do you think you can be passed on? Or kind of offset via via higher package pricing? Thanks a lot.

Hiya Harry, it's Gary here. In terms of the pricing at the moment, holidays pricing is holding up reasonably well, it's in positive territory. As you might expect, bearing in mind it is a late market, flight only tends to be more price sensitive and we've made the point on a number of occasions we're investing in load factor So pricing on the flight only is sort of mid single digits down year on year at this moment in time. In terms of the cost inflation of running through the P&L in 27, it's just over 3%. But you've also got a bit of a headwind around FX as well. So you're closer to 3.6, 3.7%. we always look to pass on cost inflation but it's very much supply and demand so we'll do what we can but I can't give you any clear view at this stage other than as I said before holidays pricing is pretty resilient and flight only is a bit more price sensitive as you would expect.

Great, thanks Gerard.

Thank you and we'll now take our next question from Gerard Carzel of UBS Your line is open, please go ahead.

Thank you and good morning everyone. Firstly, maybe one for Steve or Gary, I don't know. Any views on what a hot summer could mean? The UK obviously has seen some very hot weather. Does that impact your business and do you have to work a little bit harder? Secondly, I'd like to get your comments on how you see things with the European entry system. You've got fantastic on-time performance, but is that a concern for you in terms of getting customers back? And then lastly, I don't know if you can make some broad comments, but just how you see the market in terms of consolidation. Obviously, you've got a proposal for EasyJet, so any views on that, how you see the landscape changing over the next three to four years? Thanks.

Hello, it's Steve here. Hot summer, not worried about that at all. In fact, it's actually a good thing. Summers are, by the very nature, hot. It is the hottest time of the year. We have seen some unusually hot periods abroad and in the UK. At the end of the day people want to go somewhere warm, somewhere sunny to get away from what is the norm in the UK climate. I'm sure the hot weather will pass, certainly in the UK, and we'll get back to our normal summer which is a lot cooler. We've seen no evidence of people wanting to go to cooler destinations. Our booking profile is still pretty flat throughout the summer. So it was very strong at the start and end of the season and strong in the middle. But we haven't seen any noticeable trends at all of people trying to avoid the hot summer. Thank you for joining us. We've seen some impact with longer queues at immigration passport control etc but our customers have been relatively unaffected some have experienced the longer queues but we have not left any customers behind we've not taken off without having them all on board and one of the reasons for that is our famous red team of customer helpers who will identify the Jet2 and Jet2 Holidays customers and try and help them to get through quickly if there is an issue. We have of course been lobbying European governments to delay the implementation of the EES systems and we've had some successes. The Greek government took advantage of the delay that they can implement for five months and we've seen queue times at Greek airports improve significantly. I get a report every week of the delays that we have experienced and where we consider that the delays are bad, getting worse etc. We write to each government in each airport advising them of the opportunity to delay the implementation of the EES scheme. so we're on top of that but our red team make sure that our customers are the least affected of customers in airports. I would hope the European government might do something in the longer term We have written individually as JET2 and as part of our industry bodies to Ursula von der Leyen to advise her of the issues that people are experiencing and asking her to look again at the implementation schedule. In terms of EasyJet, as you'd expect, our policy is not to comment on market speculation. I'm not going to depart from that if that's okay. There's a lot of speculation about and I'll leave that to other people to speculate.

No problem. Thanks very much.

Thank you.

Thank you. We'll now take our next question from Damien Brewer of Kennecott Generalty. Your line is open. Please go ahead.

Yes, thank you. Good morning, everyone. Two questions from me. First of all, on the capital allocation, you've now been very clear about the Joel Coe financing of the 321 NEOs, the 700 million minimum threshold, and the two times net debt EBITDA. But if one throws that into numbers, that opens up quite significant spare capital in the business. Can you talk a little bit about how you'd think about deploying that spare capital? Is there any opportunities to accelerate growth where it's profitable, put more back to shareholders maybe, or any other thing you could think of that would obviously generate similar high returns that you've generated in the past? And then the second question, you've given us lots of detail in the presentation about customer acquisition. and your shares certainly seem to recognise that outperforming TUI and on the beach by nearly over 30% in one case this year to date. But are you seeing anything from what you've seen for example at Gatwick or Luton or in the last half decade given Bristol's now half a decade old that makes you confident and so confident in the outlook in terms of taking market share and winning share within the UK market? Thank you.

I'll take the first one. It's Gary here. In terms of capital allocation, the framework is pretty clear. We do want to continue to invest into the existing business to deliver good return on capital employed, which I think we've demonstrated for many years. In terms of growth and where we could deploy that capital, if I look back even to 2023, you can see our flown passengers are up by about 30%, so we're still very much growing. Gatwick is a significant opportunity for us, as you've seen on that presentation, in an under-penetrated market for Jet2. as is London more generally and therefore you know I do think we'll deploy more of our capital in the south of England because that represents a great opportunity for us I was very clear on the presentation as well that you know subject to satisfactory financial performance and as you've seen certainly more recently we will give shareholders capital returns and we fully expect to do that but I will reaffirm that subject to satisfactory trading in terms of our strategy you know we're very clear it's about growing the business and building a business that is the strongest in the industry and delivering long-term value creation for shareholders so hopefully that should resonate with both customers colleagues and the various stakeholders including shareholders

Hi Damien, it's Steve. On to the second question. Yeah, we are confident about our ability to capture market share. You mentioned a couple of launches we've done. If we go back a little bit to Bristol, well, we've got a good program at Bristol Airport. We've captured market share the same at Luton, Bournemouth, Gatwick. And that's because people recognize our customer service, our VIP customer service. our red teams both in resort and overseas at the airports and that's that's borne out in some of the statistics we've talked about this morning 92% customer satisfaction rate 62% rebook rate 65% net promoter score and I think people are attracted to our customer proposition they don't just want a company that Stephen Paul Heapy Jet2 Holidays is the highest ranked tour operator at the 4th best company in the UK up from the 5th best yesterday and Jet2.com the highest ranked airline in the UK at 14th best company up from 16th best company so we're certainly not resting on our laurels and getting complacent we want to improve our customer offering every year and differentiate ourselves from the competitors. And that's something that is very much recognised by our customers. When we speak to them, we ask them, you know, why have you booked with Jet2 or Jet2 holidays? Why are you sticking with them? And customers consistently tell us it is the customer service that attracts them. They want to be made feel special. And why wouldn't you? when you're going on holiday you want your holiday to start the minute you get to the airport and you want it to be seamless I certainly do when I go on holiday so to get back to the original question after quite a lengthy monologue I am very confident in our ability to capture more market share at our newer bases such as Gatwick, Bournemouth, Luton and before that Bristol

very clear thank you very much thank you and we'll now take our next question from Rory Cullinane of RBC your line is open please go ahead uh yes good morning um first question on hedging how do you approach that in recent volatility is your hedge position in full year 28 where it would typically be at this stage in the year and then secondly a follow-up question from um and Damien's on leverage and capital allocation. I can see in the capex slide, you know, capex peaks in 31, steps down significantly 32. Is the two times leverage target something you might hit in 2031 and it could be a year of peak leverage or is it more of an average in an average year? Thank you.

Hi, it's Gary here. In terms of hedging, we haven't fundamentally changed anything, to be honest with you. Because we were so well hedged, in particular on fuel, we've now moved up to about 97% for summer 26 and over 70% for winter. So we're over 90% hedged for financial year 27. and for 28, we're about 35% hedged in totality, particularly on fuel, which is broadly in line with where we would expect to be. We're not going to throw the hedging policy out the window because there's a lot of volatility. It's served us well for over 13, 14 years. But we are taking advantage of weakness in the market when it presents itself. So we're pretty comfortable with that. In terms of the second question, in terms of two times net debt, EBITDA and known cash basis, we've said, or I've said in terms of the video, over the next three to five years is when we expect to achieve that number. That very much depends on how many of our aircraft we finance during that period and also the delivery profile of the aircraft during that period which is subject to movement albeit we've managed it well. I'm not going to go into any more detail than that because I do think we've set out our targets very clearly and to get into the The intricacies of that in terms of intra-years I think would be not responsible at this stage. I think it's very clear we want to return capital to shareholders. We also want to continue to invest in the business, drive really good and meaningful return on equity and return on capital employed.

Thank you.

Thank you and we'll now take our next question from Jack Rabin of Bank of America. Your line is open, please go right.

hello good morning congratulations on results uh three questions from me if that's okay uh firstly could you refresh us on your medium-term package mix ambitions and how we should think about fiscal year 27 should we maybe expect some moderation for fiscal year 26 with the gatwick ramp and then maybe if you could provide any more details on initial progress at gatwick as well specifically details around package mix relative to the group pricing relative to the group and a refresh on startup costs associated with it from fiscal year 27 going onwards. And finally, accommodation cost inflation continues to outpace package pricing growth. I was just wondering how long do you expect this headwind to persist and what needs to change for that pressure to begin easing? Thank you.

In terms of the medium term package holiday mix, we've been pretty clear that we would expect between 60% and 65% on a full year basis. So last year was 63%. I would expect this year to be in or around the 60%. Bearing in mind it has been a much later market as a result of the Iran war. We're comfortable in that range. That doesn't mean we are fixed on that range. you know the flight only product is still incredibly important we've always made that very clear across a number of years and as Steve pointed out on an earlier call today you know people who take flight only often become the package holiday customers of the future so you know they they get all of the service for the price of a seat actually which is which is great value for them and hopefully they they see that In terms of Gatwick, the package holiday mix is a little below the 60 at the moment, but not far below the 60. In terms of the investment into this year, well, we're sort of into BAU now. So the startup investment happened last year. So we're in BAU in terms of investing in people, investing in marketing, etc. I think getting into pricing at Gatwick in all its detail is a little bit commercially sensitive and I wouldn't want to do that on this call. Oh, yeah. In terms of accommodation inflation, sorry, that's the third part of the question. Sorry about that. There's a lot to take in. No, it's all right. Accommodation inflation is somewhere in the region of about 5%. Well, that's what we think at the moment. Now, you've got to remember that's initial. But what we are seeing, particularly in the Eastern Mediterranean, you're getting a lot of special offers from hoteliers, etc., which can pull that headline inflation rate down. I think it's fair to say, though, that, you know, hoteliers in Europe are having a pretty good time of it at the moment. You know, it's not just a UK market, it's a European market as well. They have significant headwinds still in terms of labour, in terms of energy costs, etc. I'm not anticipating that coming down fundamentally over time. So therefore, you know, how we contract in the future will be very important. And that's why we are in terms of a project internally. We're looking at dynamically sourced supply, which means we get the benefit of secured rooms, but we also get the benefit of rooms that are in the later market that come in at a slightly lower price as well. So I think technology are going to help us there, and we'll get the best of every world.

Cool.

Thank you very much.

Thank you. And we'll now take our next question from Gerald Koo of Benmure Libram. Line is set, and please go ahead.

Morning everyone, can I start with package market share? What do you think happened to your UK package holiday market share? Package customers being up 1% suggest that you might have lost share if the market grew by more than 1% which seems likely. Secondly, well second and thirdly on Gatwick, um you're talking about deploying an extra aircraft there um where are you getting the slots from uh for next for summer next year and where where are you redeploying the aircraft from and also on Gatwick in terms of the potential second runway i mean what's your view on the likelihood of that happening that seems like it's cleared all of its legal challenges um and do you think you've got the fleet to take advantage of that extra opportunity

In terms of share, Gerald, I mean, it depends what you're looking at, really. If you're looking at the total atoll licences, you know, we're still at 7 million of just over 35 million that are out there. you know what you don't understand in terms of that not you but us is you know what elements of those licenses are for long haul or for cruise and things like that which aren't exactly I guess facing off directly with us in terms of our share we think it's just over 20% it hasn't changed fundamentally over the last two three years actually and so we're pretty comfortable at that level In terms of the Gatwick expansion slots, I'll pass that one into Steve. That's all right.

Thanks, Gary.

Yeah, we're pretty confident. Oh, hello, Gerald. We're pretty confident. We've got the six aircraft on sale this year. We have seven aircraft on sale for next year. We're confident we'll get the slots for that. Obviously, we've got the fleet to handle that. We have our aircraft order, which is obviously referenced in the presentation on page 13. we've got Airbus A321neo aircraft coming for the next nine years we have our fleet of 737-800 still and as you can see from that chart we can flex the fleet up or down depending on market or economic circumstances so the availability of aircraft to fill slots isn't a concern In terms of Gatwick, it sounds quite hopeful on the second runway and obviously we are fully supportive of that. It's got to go through various processes before that happens but I'm as confident as you can be in the UK on airport expansion that this will happen and of course we will be ready to take advantage of that additional capacity when it comes. One thing we do have is our aircraft order We have certainty of aircraft and we are able to respond to opportunities as they arise, as we've shown over the last few years.

Thanks very much.

Thank you and I'll take our next question from Andrew Lobbenberg of Barclays. Your line is open, please go ahead.

Oh, hi there. um can you remind us or tell us if you've not disclosed it already um what you're thinking of in terms of capacity growth for the coming winter and perhaps what's a sensible way to think about summer 27 in terms of the capacity growth and just to help us understand your ambitions for the south of the uk when you think of you know what that winter and summer coming growth will be how much of that growth is in the south and how much is in the established markets and then a second question might be around what you think might happen with the change in prime minister here do you think that will impact consumer confidence do you think it'll have any impact on Attitudes towards tourism or attitudes towards airport development north against south or or however that might play out.

Thanks so much in terms of winter Andrew and it's still a moving feast at the moment because Winter only really gets going sort of the middle of August and we've got about 400,000 extra seats on sale at the moment the majority of them in the new bases particularly Gatwick and in terms of summer 27 at this moment in time and again I caveat it by saying it is a moving picture it's about 4% and we're about 5% sold so again it's not meaningful and we think we're trying to be very responsible in terms of capacity management I'll pass to Steve for the other questions Thanks Gary

In terms of the Prime Minister, our messages to a potential new Prime Minister and the government remain consistent with those of the current Prime Minister and previous Prime Ministers. As an industry, we want the revenue certainty mechanism in place for sustainable aviation fuel and that has been a long time coming. Secondly, we want a credible and sizeable SAF industry within the UK. Still, the vast majority of sustainable aviation fuel is shipped from the Far East because we don't have enough SAF plants in the UK despite a requirement for an increased proportion of SAF each year. and we want airspace management modernised. This again is something that's being talked about for many years by previous governments and this government but unfortunately progress has been glacial. Airspace management is still based on a system largely from the 1950s and up to date modern airspace management it's been shown will reduce fuel burn and therefore carbon dioxide emissions by between 10 and 14 percent so this is something the government can do pretty easily to contribute to the reduction in carbon emissions by airlines so The last message I would give to a potential future Prime Minister is do not use the UK travel industry, the airline industry as a cash cow as previous Prime Ministers have. The obvious outcome is that prices will continue to increase and I would find it Very upsetting if a Labour government was responsible for many people not being able to take their flight or holiday and it became the preserve of the rich or privileged. I think there has to be great care taken in constantly and incessantly increasing taxes on air travel. So those would be my messages for a new Prime Minister if we get one, which are exactly the same messages as the current Prime Minister and the previous five or six Prime Ministers before that.

Thank you.

Thank you. Once again, ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now move on to our next question from Eva Castello of Bravey. Your line is open, please go ahead.

Good morning, thanks for taking my question Gary and Steve. So two from me and it's both on Gatwick. So you highlighted Gatwick is performing ahead of expectations and that's supported by the stronger package holiday mix. and assuming that's translating into stronger revenue, a better margin product, is there a potential here for Gatwick profitability to exceed that FY29 target if the mix remains at current levels or further improves? And then the second one for Gatwick is how much of your planned capacity coming online of the new deliveries could potentially be accommodated at Gatwick? In terms of additional slot opportunities, I don't know if you have any visibility on that for talking to the airport or is it just as kind of an ad hoc as they come available Lisa? Thank you.

Just in terms of your first question around Gatwick and financial year 29 I think it's fair to say that yeah assuming that the the mix continues in this way there's no reason to believe it won't as people become more aware of our brand and not just aware they understand what we're about I think that bodes well the net promoter scores are in line already with our biggest base, which is Manchester, as is the on-time performance, etc. So we're learning about Gatwick as we go along. And I would like to think we could exceed those FY29 targets. Clearly, we're investing in load factor at this moment in time. We want to get as many bums on seats in this financial year and get in front of people But over time that will moderate. And yeah, we're very happy and very encouraged with the performance thus far in what everyone had said would be a challenging market, etc. But we believe that our product stands alone and people are certainly recognising that.

Thanks Gary and in terms of the capacity yes we are ready to fill capacity as it becomes available in Gatwick or indeed any in any other of the 13 bases that we have Gatwick is obviously the newest base and we do have plans to grow that but the other bases are We can put additional capacity in as well owing to our aircraft order with Airbus. We still have well over 100 aircraft to come over the next few years. Airlines come and go and at Gatwick this is particularly the case being the biggest leisure airport in the UK. We see airlines sometimes withdraw operations, reduce operations. do some trimming and slots will become available. We look at the slot situation on a regular basis and we sometimes will opportunistically take those slots again because we have the availability of aircraft. Other than that, we will wait for the annual slot process and apply for our slots and we're as always pretty confident we will get those.

Thank you.

Thank you, Bill. And I'll take our next question from Richard Stiver of Deutsche Bank. Your line is open. Please go ahead.

Thanks very much. Good morning. Just a few quick ones for me, please. The first one is you've spoken a lot about the later booking profile for summer 26. I know it's very early days, but are you still seeing a later booking profile for this winter and even maybe next summer? I just want to see if that trend is still there. The second question is you've spoken a lot about investing in new bases. and they headwind to profitability from like Gatwick. I see that you're also opening new destinations such as Egypt and Tunisia. Could you say if there's any financial impact from ramping up in your destinations as well? The third question, I saw non-ticket revenue up 4%. You said that's a lot to do with the retail operating center. Do you expect to be able to sustain that sort of level of growth? So, you know, is there still a lot of low hanging fruit you can go for on that front? and I'll just leave it there. Thank you.

Okay in terms of the later booking profile it's very early days for winter and for summer. Winter typically doesn't really get going until end of August, September when people start returning from the holidays so it's too early to give a view really. I'm not disappointed with where we are on load factors for either of them but It's very, very early days. In terms of the new destinations, there's not really a big financial impact in starting new destinations. We had three new destinations this year and we've got two destinations starting in the winter in Egypt and another couple in summer 27. It's not a massive financial impact there and it doesn't cost a lot to open a new destination so that's not really going to have an impact. I'm pretty encouraged by what we're seeing in those destinations in terms of new bookings. The likes of Sharm El Sheikh, Haggadah and Tunisia will be a good source of customers we think for not only the summer but the winter.

In terms of the retail operations centre, it's performing well. We're in the first throes of dynamic loading now from various departure bases, so we're learning quite a lot around that and the more we learn, the more we'll be able to put back into the customer experience and hopefully what that will mean is an increase in spend per head. you've got to remember as well that one of the the key things in terms of the business case was the fact that we won't be carrying around standard bar sets and that should be a saving on weight and therefore a saving on fuel and so far so far we're ahead of where we expected to be in terms of the investment case for the retail operation center so cutting to the chase Richard I'm very encouraged. I think there'll be further growth, whether it be 4%, 3% or 5%. I don't know at this stage. But but certainly, you know, it's been very positive since we've we opened the centre.

Great, thank you. I'll just quick follow up just in terms of the jet fuel price. I know you gave 7.43 as a hedge price for this financial year. What was it sort of last year? So in terms of what the sort of like for like headwind may be?

In terms of for next year or this year, sorry.

I think basically what the difference will be between this year versus last year.

The average rate for the full year is about 4% favourable at this stage, yeah. 27 versus 26. Thank you very much, thank you.

Thank you, we'll now take our next question from James Goodall of Rothschild & Co, Redburn. Yolani Simpson, please go ahead.

Hi everyone, thanks for taking my question. I guess firstly on distribution, in the presentation you gave us some great colour about the share of direct booking shifting towards more loyal customers. I guess, are you able to talk to the share of your total bookings, which are direct, how that's trending and how you expect that to evolve as customers start to use LLMs at the inspiration stage of booking travel? Secondly just on capex looking at the appendix of the slide deck it looks like there's been a bit of a change in capex timing I think 350 million less capex for next year versus what you outlined at the interim results so I guess what's changed here in terms of delivery timings and is there an impact on growth and then very finally just on geographic mix are you seeing any shift in customer demand patterns between the eastern east and western meds and if so you know how you're reacting to that and does that come with any impact to your margin profile thank you.

Thanks in terms of distribution well for holidays just under 80 percent of our bookings are direct and that's been pretty consistent over the last few years with yet to Seat Only, then the majority of our bookings are direct. We've not seen a big impact from LLMs at the moment. There's been a lot of talk about AI searches, etc. That will, of course, evolve, but it's still very much a live issue with some of the big tech companies, how this will work for AI and how they can commercialise searches in the AI environment. we've not seen an awful lot of change so far it's still very early days but something we are very involved in and monitoring very closely as to how perhaps we have to change our model our underlying data etc to allow us to be searched so it's very early but distribution is pretty similar to last year and not really changing much the mix the geographical mix we saw a reduction in bookings in the east when the conflict started the likes of Turkey, Cyprus, Bulgaria and some of North Africa the booking rates slowed down because if you look at a map they are closer geographically to the conflict zone even though You know the destinations we've been talking about are more than 2000km away but nevertheless they were impacted. We've seen those destinations come back, obviously the bounce back in percentage terms is bigger for those destinations but all destinations at the moment are seeing reasonably healthy demand but the eastern destinations, Turkey, Cyprus, the eastern Greek islands, Bulgaria, North Africa have seen a bigger bounce back to where they were following the start of the conflict so people seem to be putting the conflict to the back of their minds and thinking about the future now and many people seem to be thinking about going on holiday and committing themselves to going away and we're ready We're ready to take that. We've had some very good offers from our hotel partners, particularly in the East and Mediterranean, and we're passing those offers on in the form of great discounts for our customers.

Just in terms of the capex timing, obviously we are reacting to what Airbus are estimating in terms of the delivery slots, etc. As you would expect, we built in quite a bit of slack, bearing in mind that everything's been going on there. We also have tremendous fleet flexibility anyway, in terms of when we can retire aircraft, when we can hand back operating leases, etc. So to cut to the chase, It's timing only and it doesn't undermine any of our growth plans.

Brilliant. Thanks so much.

Thank you. With no further questions on the line, I will now hand it back to the management team for closing remarks.

Okay, thank you very much everyone for attending the call this morning. I hope you found the presentation informative and hopefully you'll leave this call as positive as Gary and I are. We're very pleased with the results we've presented to you today. We've given an update on trading within those results and I hope you're as excited about the future as we are so unless there's anything else I think Gary and I will say thank you once again we'll see some of you over the next few days and thanks for attending.