Great write-up - a name I'm also pretty heavily invested in.
I think some investors find Jet2's fairly low margins offputting (their target is 5-8% operating, much lower than most other airlines). However, it's not an apples-to-apples comparison - most of their revenue is attributable to the hotels, but since they're effectively just a reseller of these, the expected margins on those is a lot lower. I'd guess if you were to split the airline and the hotels into two separate businesses, you'd see something like 12% margins at the airline and 3% on the package holidays - though of course the business wouldn't work so well if they were separate.
Great write-up - a name I'm also pretty heavily invested in.
I think some investors find Jet2's fairly low margins offputting (their target is 5-8% operating, much lower than most other airlines). However, it's not an apples-to-apples comparison - most of their revenue is attributable to the hotels, but since they're effectively just a reseller of these, the expected margins on those is a lot lower. I'd guess if you were to split the airline and the hotels into two separate businesses, you'd see something like 12% margins at the airline and 3% on the package holidays - though of course the business wouldn't work so well if they were separate.
Great point, thanks for the contribution!