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Jet2 raises £422m from investors after extending flight cancellations

Jet2 raises £422m from investors after extending flight cancellations

Budget airline Jet2 has announced it has raised £422million from investors just a few days after it scrapped all flights and holidays until mid-April.

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Budget airline Jet2 has announced it has raised £422million from investors just a few days after it scrapped all flights and holidays until mid-April.

It stated that the money would ‘provide sufficient liquidity’ to the business during the coronavirus pandemic and help it recover when demand inevitably comes back.

More than 35 million placing shares and just under 600,000 retail shares were offered by the company at a discount of around 9.1 per cent. The firm said it received ‘strong support’ from both shareholders and new investors.

Grounded: Jet2, which is based at Leeds-Bradford Airport, has been severely affected by the quarantine restrictions in the last year and has drastically scaled back its flight programme

Grounded: Jet2, which is based at Leeds-Bradford Airport, has been severely affected by the quarantine restrictions in the last year and has drastically scaled back its flight programme

Grounded: Jet2, which is based at Leeds-Bradford Airport, has been severely affected by the quarantine restrictions in the last year and has drastically scaled back its flight programme

Despite the scale of the financial package, shares in Jet2, Britain’s third-largest scheduled airline, plunged 7.5 per cent to £12.01 in early trading.

The travel operator, which is based at Leeds-Bradford Airport, has been severely affected by the imposition of quarantine restrictions by governments in the UK and Europe, and has drastically scaled back its flight programme.

On Tuesday, it declared that due to ‘ongoing uncertainty,’ all flights will not go ahead until April 14, having already announced in January that they would be suspended up to late March.

Jet2 first halted all its flights on March 11 last year and only restarted them on a gradual basis from mid-July. The following month, it told pilots’ union BALPA that it would be making 102 of its pilots redundant.

This caused them immense financial harm, and in its results for the six months to September 30, the firm reported a decline in passenger numbers of over 90 per cent and a pre-tax loss of £68.7million compared to a £278.6million profit the year before.

Executive Chairman Philip Meeson said the company’s board ‘believes that the proceeds will provide sufficient liquidity on an extended and likely unpredictable shutdown basis to deal with this continually challenging trading environment.’

In its results covering the six months to September 30, Jet2 reported a decline in passenger numbers of over 90 per cent and a pre-tax loss of £68.7million

In its results covering the six months to September 30, Jet2 reported a decline in passenger numbers of over 90 per cent and a pre-tax loss of £68.7million

 In its results covering the six months to September 30, Jet2 reported a decline in passenger numbers of over 90 per cent and a pre-tax loss of £68.7million

He added: ‘The Board remains of the belief that once able to do so, our Customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that Jet2.com and Jet2holidays will continue to have a thriving future.’

Health Secretary Matt Hancock warned yesterday though that it was ‘absolutely essential’ to roll out Covid-19 vaccines so that Britons could go on summer holiday.

‘I know that people are yearning for certainty over whether they can have a summer holiday,’ he told BBC Breakfast, ‘but pandemics are difficult times and there is a lot of uncertainty, so I am afraid that people will have to be patient before we can get that certainty.

‘We are doing everything that we possibly can to make sure that people can have a holiday this summer, but the vaccine rollout is absolutely essential to that.

Quiet beach: Trade body Visit Britain estimated that the UK received 96 per cent fewer inbound visitors between April and June last year against the same time in 2019

Quiet beach: Trade body Visit Britain estimated that the UK received 96 per cent fewer inbound visitors between April and June last year against the same time in 2019

Quiet beach: Trade body Visit Britain estimated that the UK received 96 per cent fewer inbound visitors between April and June last year against the same time in 2019

‘We will set out more in more detail when we can, but at the moment unfortunately there is that uncertainty still.’

Currently, it is illegal to go on holiday either in the UK or abroad. People may only travel if they have a ‘reasonable excuse’ such as going to work or visiting a hospital. 

The restrictions have caused immense harm to the travel industry, with trade body Visit Britain estimating that the UK received 96 per cent fewer inbound visitors between April and June last year against the same time in 2019. 

It has forecast that the UK will receive 11.7 million foreign tourists this year, which would be about 21 per cent higher than the same number in 2020, but over 70 per cent down on their levels two years ago.

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This post first appeared on Dailymail.co.uk

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