Jet2 Shares Dive 13% After Weak Demand and Late Bookings

Analysts Cut Earnings Forecasts as Airline Faces Pricing Pressures

Jet2 (LON:JET2) saw its share price tumble by over 13% on Thursday following a trading update that highlighted weaker-than-expected demand for flight-only bookings and a shift in customer booking patterns towards later in the summer season. The announcement spurred analysts to revise earnings forecasts downward, signalling a bumpy ride ahead for the airline and holiday provider.

Late Bookings Hit Summer Demand

Jet2 revealed that summer 2025 holidaymakers have been booking later than usual, particularly since July. While package holidays remain resilient, showing modest price increases, demand for flight-only tickets has softened significantly. This shift in consumer behaviour is seen as a key factor weighing on the company’s short-term financial outlook.

• Late bookings now dominate summer 2025 trends
• Flight-only tickets face price pressure
• Package holiday sales continue to show strength

Despite the headwinds, Jet2 has maintained its summer seat capacity at 18.5 million, an 8% increase on the previous year, showing confidence in longer-term demand recovery.

Analysts Slash Forecasts for 2026 and 2027

Leading brokerage Jefferies responded swiftly to the update, cutting their earnings projections:

• 2026 EBIT cut by 6% to £462 million (from £493 million)
• 2027 EBIT cut by 8% to £498 million (from £540 million)
• Revenue forecasts now stand at £7.58 billion for 2026 and £8.17 billion for 2027
• EPS lowered to 210p (2026) and 214p (2027)

Jet2 now expects earnings to fall towards the lower end of analyst expectations, with consensus EBIT ranges between £449 million and £496 million.

Winter Season Outlook and Capacity Trimmed

Jet2 also scaled back its seat capacity plans for the winter 2025/26 season:

• Initial forecast: 5.8 million seats
• Revised down to 5.6 million seats
• Still represents a 9% year-on-year increase

The company stated that a significant portion of winter capacity remains unsold, but it aims to keep pricing attractive to stimulate demand during the quieter travel months.

Market Reaction and Share Price Impact

Shares in Jet2 fell to 1,613p, trading near their lowest level in four months. Prior to the drop, the company’s market capitalisation stood at £3.5 billion.

Despite the disappointing update, Jefferies maintained a "buy" rating, highlighting Jet2’s vertically integrated business model as a strength that provides flexibility during volatile times. However, the brokerage did revise its target price to £21 (from £22), citing increased UK market uncertainty.

Bright Spots and Long-Term Outlook

While flight-only sales face mounting pressure, Jet2’s package holiday business continues to shine:

• Demand for packages remains stable
• Pricing shows steady growth
• Integration across flights, hotels, and transfers adds resilience

Jefferies pointed out that Jet2 stock currently trades at a 43% discount to pre-pandemic P/E multiples, potentially offering value for long-term investors if demand stabilises.

Conclusion: Turbulent Short-Term, But Long-Term Potential?

Jet2's recent trading update has highlighted some short-term turbulence, especially in the flight-only segment. However, the strong performance of its package holidays, combined with a strategically integrated model, may help the company weather the storm.

For investors, the current discount on Jet2’s share price might represent a buying opportunity, assuming travel demand rebounds later in the year. However, the outlook remains closely tied to consumer confidence, pricing discipline, and economic uncertainty in the UK.

Sources: (Investing.com, Reuters.com)