Dart Group Sees Demand Boost After Thomas Cook Collapse
Dart Group, the owner of British airline and tour operator Jet2, has raised its profit guidance due to a boost in its passenger numbers following the collapse of its former rival Thomas Cook last month.
The news of the group's raised profit guidance sent its shares soaring almost 13%.
Dart, which runs package holiday company Jet2holidays, said that it has received good levels of late season bookings in its leisure travel business, with strong demand for its flight-only and package holiday products.
Thomas Cook, the world's oldest travel company whose shops have been a feature of British town centres for generations, collapsed last month, stranding tens of thousands of passengers as its UK business went into liquidation.
Dart, which runs Britain's third-biggest airline in terms of passenger numbers behind easyJet and British Airways, said that it will continue to assess the impact that Thomas Cook's collapse will have on its business in the coming months.
"Dart's integrated business model has been well proved and we see the company being a LT (leisure travel) industry winner," Stifel analysts said. "The next couple of years could prove to be a landmark period for the group."
Last month, European tourism group TUI said that it was assessing the impact of the collapse, but stuck to its full-year forecast.
TUI said that it will boost its travel portfolio for German tourists and attract 500,000 new German customers next year, as it is offering partnerships to travel agencies affiliated to insolvent Thomas Cook.
Shares in TUI and British Airways owner International Consolidated Airlines were up more than 3%.
Dart, like its peers, has flagged headwinds due to rising costs related to fuel, carbon and other operating charges.
"Given the cost pressures the travel industry is facing in general, which will intensify given the weakness in sterling, plus the deepening Brexit uncertainty and the impact this may have on consumer confidence, we remain very cautious in our outlook," the company said.
The company expects to exceed the current market forecast for full-year profit before foreign exchange revaluations and tax. Analysts expect it to report an annual pre-tax profit of £149.5 million for the year ending March 31, according to Refinitiv Eikon data.
Dart's airline Jet2.com competes against Ryanair Holding Plc and easyJet, while its package holiday business Jet2holidays competes against TUI.