Jet2 jumps as summer bookings gain momentum despite Middle East conflict

July 8 (Reuters) - British travel company Jet2 said on Wednesday that customers have become more willing to commit to holidays after holding off bookings during the conflict between Iran and Israel, with booked-to-date summer passengers up 7.1%, sending its shares up as much as 16%.

The global aviation and leisure industry has been contending with higher costs and weak consumer confidence linked to the Iran war, although Jet2 said booking trends had improved in recent weeks.

The package holiday and airline company said on-sale capacity for the summer was running 7.7% ahead of last year, with the average load factor for the first four months tracking 1.2 percentage points higher, helped by targeted price cuts to draw in late bookers.

"We have been encouraged by performance for Summer 2026 to date, despite the Middle East conflict leading customers to book closer to departure, a trend that is continuing across the peak summer period," Jet2 said in a statement.

Its shares were last up 8%, after earlier hitting their highest level since January.

Jet2 posted a 7% drop in pretax profit to £551 million ($736 million) for the year ended March 31.

The UK's third-largest airline has sought to mitigate higher fuel costs by increasing its hedge position, which currently is covering 90% of its full-year jet fuel requirements at an average price of $743 per metric ton. In April, Jet2 said it was 87% hedged for the summer, with jet fuel swaps at an average price of $707 per ton.

Jet2, which launched a £250 million share buyback, said its new London Gatwick operation was performing ahead of its initial expectations, supported by a stronger-than-expected package holiday mix.

"Despite better momentum recently, in our view it will still remain a more challenging near-term earnings set-up given a competitive UK outbound leisure market, the impact from the Middle East, and immaturity at recent new bases, in particular Gatwick," JPMorgan analysts said in a note.

($1 = 0.7482 pounds)

(Reporting by Neeshita Beura in Bengaluru; additional reporting by Yadarisa Shabong; Editing by Rashmi Aich and Louise Heavens)