Jet2 Plc has told investors that costs associated with bringing a London Gatwick base online could lead to a material shortfall against market expectations for the year ending March 2027. Management said these start-up expenses are likely to weigh on operating profit, even as the company maintains that results for the year to March 2026 will be in line with consensus.
Broker Jefferies put its FY27 operating profit estimate at about £400 million, compared with a company-compiled consensus of £444 million, leaving a gap of roughly £44 million after accounting for £40-50 million in Gatwick investment costs. The broker kept a "buy" rating and a 2,100 pence price target. Jet2 shares closed Tuesday at 1,287 pence.
For the year ending March 2026, Jet2 said it expects operating profit to match the consensus number of £439 million, after absorbing around £10 million in Gatwick promotional and resourcing start-up costs.
Chief executive Steve Heapy said the group was "very pleased with how the 2026 financial year is concluding," and reiterated a focus on customer value, saying the company remained "committed to pricing that is attractive and represents real value to our customers."
Analysts highlighted the company raised concerns that Jet2's stated approach to pricing could put pressure on yields. The company said it is "investing in load factor" for Summer 2026, language that implies yield dilution to fill expanded capacity, and that marketing spend is being "reinvested into pricing."
Last summer, package pricing increased by just 3%, while flight-only fares fell by 7%. For Summer 2026 the airline has increased total seat capacity by 8%, reaching 20 million seats, compared with estimated growth in the total UK short and medium-haul market of 5.5% as measured by OAG. Of the incremental capacity, 1.1 million seats come from new bases at Bournemouth, London Luton and London Gatwick, while established bases grew by 2%, adding about 0.4 million seats.
Bookings are running 7.9% ahead of the comparable prior year, including more than 260,000 passengers already booked at Gatwick ahead of that base's March 26 launch. Package holidays continue to make up roughly the same share of bookings as last summer, at around 66% of the total.
The company said it has hedged more than 75% of its fuel requirements for FY27 at favourable rates, which it expects will partially offset hotel accommodation inflation and upward pressure from Sustainable Aviation Fuel and carbon costs.
On the fleet side, Jet2's Airbus A321neo fleet will expand to 31 aircraft this summer, underpinning a peak flying programme of 139 aircraft. The group expects this fleet mix to deliver an average unit cost saving of £10 per seat.
Jet2 currently operates from 13 UK bases. After the launch of the Gatwick base, the company said more than 90% of the UK population will live within a 90-minute drive of one of its 14 bases.
Jefferies also pointed out valuation metrics, noting Jet2 trades at 6.2 times FY26 estimated earnings, equating to a 50% discount to historical levels.