We are talking about the published accounts of a PLC here, so I'm not sure why you wouldn't believe the numbers reported. The financial position of the company is frankly amazing considering the state of the industry.

I don't know anyone working for them so couldn't comment on the other stuff mentioned.

I have 0 beef with Jet2 at all, I have friends who work there. But their numbers are seriously suspect. I’m not saying it’s fraud, but I don’t believe you’re getting the “real” figures.

How can a company who only makes roughly 100 million a year (approx), and who has had to pay off 65 brand new 737s in the last 5 years, and have 1 year of absolutely NO revenue, whilst opening new bases, all of a sudden have £1340million in the bank

I seriously hope they are financially ok, however I wouldn’t be sounding off saying they’re “stable” and safe.

There is an explanation in the Preliminary report here:
"This liquidity has been raised from a diversified range of funding sources including: the utilisation of our £65m Revolving Credit Facility; the drawing down of the Bank of England's Covid Corporate Financing Facility ("CCFF") of £199m; the financing of unencumbered owned mid-life aircraft for £102m; the sale of Fowler Welch, our non-core Distribution & Logistics business, for gross proceeds of £99m; plus two oversubscribed equity placings raising gross proceeds of £594m, for which we are grateful to our Shareholders for their support. Post the financial year end on 31 May 2021, Jet2 plc signed a new unsecured £150m term loan maturing in September 2023 with its supportive Banking group. In addition, on 3 June 2021, the Company announced the successful issuance of £387m of senior unsecured Convertible Bonds due in 2026 carrying a coupon of 1.625%, the offering for which was heavily oversubscribed."

So yep, I believe they have the money, however.... £903 Million of it, almost two thirds, is Debt, the credit facility, the CCFF, the loan, the aircraft, and of course the senior unsecured Convertible Bonds.

Holey moley, and here I am worrying about my credit card statement.

I have a few of my old colleagues working there, employed at the moment but worried sick about their future, and I have serious desires for them to carry on as I use them for various holidays. However they look to be in a very precarious position and coupled with this government we have it must be of concern. Amazing how shareholders are supporting the company as their record of profitability is not exactly staggering. Fingers crossed that the support continues, it would be a major disaster if they folded. Could not imagine the carnage it would wrought in our industry.

We are in turbulent times, need to hold on, everyone and if appropriate say a few prayers.

Ouch! That’s going to be a tough winter for J2 and obviously every other airline on the go.

The announcement today that travel is permitted to amber list countries is a huge boost to the industry. Green list flights already operating have high load factors (for all operators). If Jet2 are flying, they arent spending any of that debt but are making money. It can sit in their account gathering interest and then be paid back in full when the payment becomes due.

To put that in perspective, when Thomas Cook went bust, they had liabilities of £1.5 billion. TUI currently have liabilities of 4.5 billion.

Rumour has it that Mr Meeson has visited both Seattle and Toulouse in recent days. Read in to that what you will.

To put it in perspective, Tui is made of 5 airlines, 15 cruise ships and 380+ hotels paying back its liabilities, it owes more because it’s absolutely massive.
J2 is just 1 airline. So the debt ratio is higher and will take longer to repay its debts.

All this aside. Let’s hope this move forward gets everyone back working and both companies survive and thrive in the future.

You’re spot on there Biff, people compare the two like-for-like, without realising Jet2 are small fry compared to the travel behemoth that is TUI. Jet2 are just an airline and an online travel agency.

The Flying Stool

I would be careful, Thomas Cook UK had 80ish aircraft, similar to Jet2 and while they were multinational,Jet2 are currently £0.9 Billion in the red. The good news is the Amber list is now open, of course individual countries may yet decide to restrict UK tourists, that will remain to be seen. But this summer is a washout. It will be a tough ride ahead.
I do admire your optimism about visiting Boeing and Airbus, but as you say its a rumour

Thomas Cook UK didn’t have anything like 80 aircraft. I think there were around 30 in the fleet when it folded.

Brian Per

Really? What is your source to say that Jet2 is £0.9billion in the red? Latest financial reports indicate that they have a balance of £1.46billion in own cash. I’m no financial expert so just quoting from their own preliminary results…

In effect they’ve drawn £0.9 billion cash off a credit card and popped into the current account. So yes £1.46 billion in cash but where it has come from is the issue (as needs paying back)

Thanks for the clarification. The report certainly puts a positive take on things which can sometimes make it hard to see where funds have come from (to the untrained eye anyway!)

MANTHR

If you bother to read my earlier post, you will see that the £0.9 Billion has come from borrowings. Dct-Mopas has clarified it quite nicely.
It is all in the company report titled, Preliminary Results 2021, I quote page 4 word for word, or if that is too much have a look at PRELIMINARY UNAUDITED RESULTS FOR YEAR ENDED 31 MARCH 2021, under Company Announcements, scroll down to 2021 Key Performance Highlights, under Liquidity the 4th paragraph explains everything, again it is the same I copied and pasted.

All here: https://www.jet2plc.com/Investor_Rel..._08_July_2021/

If that is no good, well, I could make a disparaging comment regarding Crayola and Paper, but I am not like that.

Rt Hon Jim Hacker MP, absolutely right, I do apologise things we post in the middle of the night.

For what reason would they post false or inaccurate accounting?

Fair enough, I hadn’t seen your post from further back…. Those who have loaned the moneys to Jet2 must have a lot of confidence in them to support them with that amount of money. Profit per year up until COVID had been very good I believe.

To put it into perspective,
£215 Million off the banks, unsecured, but short term loan (£65 Million in revolving credit, a bit like a credit card and £150 Million in unsecured loan)
£387 Million in senior Converted Bonds, typically done by start ups, to raise capital, high risk but offer higher reward. In reality they will have to pay back a higher amount of interest on these, as there is a risk.
£103 Million mortgaging aircraft, a bit like a loan on your car.
and finally £199 Million off the UK government, a loan to help companies due Covid, again a loan.
I would not say confidence, the only confidence I see is in the fact Jet 2 have a lot of large assets, Aircraft, Parts, Engines airport equipment all of which can be sold to service any debt.

In fact in 2019, the last year untainted by Covid, Jet2 made £177.5 Million before taxation. Thanks to covid they will be repaying this debt for some time.

As will almost every other airline. Jet2 are still in a better financial position than most other carriers.

I would be interested to see your fiscal analysis of other carriers, Ryanair, Tui, IAG Whiz, anyone else?

No I believe I said I don't have an issue with Jet 2 not 0 Beef, I am sure other airlines are in debt, that is not the point.

It seems on here there is a view that nothing wrong can be said against Jet2, maybe it is because they are the plucky Brits, or something else, I don't know? But woe betide anyone with even hint a something being wrong in the state of Denmark and they are shouted down as is now.
Lets face it Jet 2 have about £434 million in in the bank the other £904 Million is borrowing, some of which is short term, yet there are those on here who feel all is well in the state of Yorkshire, it is basic fiscal sense, if you borrow more than you earn (2019 £177 Million), sooner or later you will be in trouble.
But if you still want to bury your heads in the sand, I have a friend who has a great investment offer for you all, his name is Jordan Belfort, he used to run a very successful investment house called Stratton Oakmont.

I suspect some of the perceived delusion/optimism is that whilst it is not desirable to have large amounts of debt, it reads like Jet2 have found it relatively easy to obtain the funds to prop the bank balance up. At a consumer level, lenders are being a bit more careful about giving out money in these times, and from some non-industry related businesses I know of, this is a problem for businesses too. That it appears to have been relatively easy (oversubscribed share placings etc), it shows that there is at a fairly reasonable level of confidence in the company to move forward strongly if they can get to the other side of this. Whilst previous years profits show that it will take some time to pay back the debts, perhaps the market and lenders might view having a higher confidence in moderate returns is better than a lower confidence in record breaking returns.

Brian Pern

I borrowed significantly more than I earn in order to finance my house, as Do most of the U.K. mortgage market I’d suggest. It’s how debt works. You’re only in trouble when the debt becomes unmanageable or unserviceable. Neither you or I, or anyone on here knows the point at which that will become the case with Jet2 (unless you are their CFO).

OhNoCB

Well said, the company is essentially banking that stockpiling cash now (through cheap debt) it will be in a position to emerge from this pandemic in a position of strength and be able to expand rapidly in the recovery. Will it pay off? I don't know but it has a couple of advantages:

Space for expansion in the UK (BRS being the first example), strong customer loyalty both before and through the pandemic due to their quick refund response.

In my opinion they lack any real competition in what they do so do not fear a collapse anytime soon, TUI are indeed a behemoth but have so many plates to keep spinning I'm not sure they can focus on flight/package enough to ever really hurt JET2 and the proposed easyJet holiday expansion has probably been delayed by the stresses of the pandemic. On the beach and all of these holiday sites will have been devastated by the pandemic and their initial poor response to customer refunds I think both TUI and JET2 will essentially absorb their customers in house over the next few years.

Hopefully greener times await us all.

Looking forward to the greener times. I definitely need a holiday.

Whitemonk Returns

I hope the last sentiment is right however; I think if you think they have no real competition in their sector now, is, with respect, misguided, There is probably more competition for holiday type flying than ever before. You have the big boys eying up this business right now like BA in the UK and the likes of Wizz who seem to have been throwing cash about, plus potentially new starters. Not to mention Easy who were already dipping an orange toe into the polluted water.

With cheap aircraft and crews on sale now is the time to start your budget airline.

Which of course is easier said than done.

A good friend of mine has access to two 73 Classics, in reasonable condition, he can even get an AOC, making it work however.....
I've been involved in the start up of one airline, I wont make that mistake again.

I am sure though, Ryanair, with Buzz, Lauda and Malta branding will be looking at the UK market, Easy, Wizz etc and if so it could be come very tough and saturated soon.

High Viz Vest

Flight only then I agree with you, but TUI and most definitely JET2 are not competing with RYR/WZZ etc, it would be pointless when they flood the market with 9.99 flights, they would get killed. Full service package holiday customers are what the first two will be filling their airplanes with over the next decade and in that respect they have very little to no real competition apart from each other, and thankfully there is enough space for them both to thrive.

Interesting that RYR have announced the intention to recruit 2000 over the next three years and WZZ have started interviews too. Hopefully all will have an opportunity to get back in the air over the next 12 months

Do Ryanair make money by training pilots? I guess there will be large numbers of boys and girls at training establishments standing in line with money to pay one last time to live the dream, nightmare.

Good luck all