February 19, 2018 / 10:30 AM / a year ago

Owner of budget airline Jet2.com sees profits 'materially ahead'

FILE PHOTO: Jet2.com aircraft boarding stairs are stored at Stansted airport in Stansted, Britain June 30, 2017. Picture taken through glass. REUTERS/Russell Boyce

LONDON (Reuters) - The owner of British budget airline Jet2.com said annual profit would be “materially ahead” of current expectations as pricing in the holiday market strengthened, lifting its shares.

Parent company Dart (DTG.L) said on Monday its profit for the twelve months ending March 31, 2018, would be boosted by “a more normalised pricing environment” for flights and holidays following a previous period of heavy discounting.

Its shares were up 14 percent to 740 pence at 0950 GMT.

Jet2.com, which last summer was Britain’s fourth largest airline by passenger numbers and also sells holidays, would have benefited from the collapse of rival travel firm Monarch last year.

Monarch’s demise came partly as a result of tough competition in the Spain, where a price war among airlines and tour operators coincided with hotels raising prices.

Monarch’s collapse removed capacity from the market, easing pressure on prices, which has also recently boosted Jet2.com’s bigger rivals easyJet and Thomas Cook.

Analysts had expected Dart to post pretax profit of around 95 million pounds ($133 million) this financial year, before raising those estimates to about 113 million pounds on Monday.

Dart, however, said it was cautious on pricing for the coming summer holiday period and it expected its performance for its next financial year to be in line with the current one.

Dart also runs a food distribution business in the United Kingdom, which it said was focused on growing its revenue pipeline.

Reporting by Sarah Young; Editing by Mark Potter

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