Dart Group runs the UK’s third largest ATOL licensed package holiday tour operator Jet2holidays. The group believes that Jet2holidays has “tremendous potential” with customers up a fifth in the year to March 2015. A profits upgrade and a large new aircraft order both highlight the business momentum.
It has been a strong summer for the airline and travel industry with easyJet and Ryanair both seeing record trading in August. A period of wet weather and the weak euro have both made a break in the sun more attractive.
Dart Group has also seen an uplift with strong package holiday and flight-only sales. The group is therefore: “optimistic that… performance for the financial year ending 31st March 2016 will materially exceed current market expectations.”
Dart Group runs Jet2.com and Jet2holidays
Source: Dart Group Annual Report
The company has also announced a US$2.6bn list price aircraft order for 27 new Boeing 737-800NG aircraft. The actual cost is at a “significant” discount to this figure but cannot be revealed for commercial reasons.
Airline and holiday businesses are volatile given changing consumer demand and low profit margins. However, the strengthening UK consumer environment and weak oil prices both support profit margin expansion.
While the share price of Dart Group has continued to strengthen the forward P/E ratio is modest at 13X. The group’s first half trading update will be in mid-October with interim financial results set to be announced in November.
Leisure Travel: Jet2.com & Jet2holidays support each other
Dart Group’s Leisure Travel division runs the ATOL licensed Jet2holidays business and the budget airline Jet2.com. The airline travels to high volume European city break destinations, summer holiday spots and winter ski areas.
Dart Group offers the North of the UK “fun in the sun”
Source: Dart Group Annual Report
The two businesses work well together with Jet2holiday customers travelling on Jet2.com flights. In the year to March 2015 package holiday customers made up 33% of Jet2.com seats sold versus 30% the year before.
The September trading update has seen this figure increase further due growth in the package holiday business. This helps to underpin demand for Jet2.com seats and helps offset price competition from Ryanair and easyJet.
The symbiotic relationship also works the other way around with the consumer presence of Jet2.com increasing the profile of Jet2holidays. Only 31% of Jet2holidays were…
