Jet2 benefits from package holiday demand amid ‘softer’ flight-only yields

Increased demand for package holidays gave Jet2 a boost this summer as “resilient” pricing offset “softer” net returns from flights alone.

The group said package holiday prices showed “a modest increase compared to last year”, with the number of customers up 8% year-on-year.

And while ticket-only revenues were lower, the number of passengers traveling on a flight alone increased by 17 percent.

According to the group, the capacity of seats sold was 12.4 percent higher than last summer, at 17.17 million. That is a “slight increase” compared to the level reported in the preliminary results.

Jet2 said there had been a “strong” increase in late bookings in July and August, with September showing a similar trend.

As a result, the average occupancy rate was 1.2 percent behind that of the summer of 2023, at the same point.

The number of customers with a package holiday so far has increased by 8 percent and represents 70.2 percent of the total number of departing passengers. The number of passengers who only book a flight has increased by 17 percent.

Jet2 said: ‘Looking ahead, we continue to believe that package holidays are the right product for value-conscious customers.

‘By offering a wide choice of quality products and being flexible with variable duration holidays, our customers can easily tailor their holiday plans to their individual budget.’

Jet2 operates from 11 UK airport bases at Belfast International, Birmingham, Bristol, East Midlands, Edinburgh, Glasgow, Leeds Bradford, Liverpool John Lennon, Manchester, Newcastle and London Stansted. A further base at Bournemouth Airport is due to open in February 2025.

Jet2 shares rose 0.62 percent or 9.00p to 1,464.00p on Thursday, after rising more than 39 percent in the past year.

Russ Mould, investment director at AJ Bell, said: “Jet2 has built a reputation as one of the most trusted names in the travel sector.

“There is a lot of confidence in the company and that has helped it to grow its market share over the years and become one of the big players in the lower cost segment of the market. Demand is generally robust and the company continues to do well.

‘Unfortunately, that’s not enough for investors. They are currently afraid of a lack of profit visibility and it doesn’t look like the situation will improve anytime soon.’

He added: ‘The sector has suffered as consumers leave booking their flights until the last minute, leading to a price war between airlines. Names like Jet2 are still attracting customers, but not at the optimum price.

‘The majority of the summer season has been good for Jet2, with an increase in package holiday customers offsetting lower ticket prices for solo travellers.

‘Unfortunately, the clientele consists more of last-minute Larry than pre-booked Betty. There is no end in sight to this booking trend and so it is uncertain how many people will end up sitting in seats for the last few months of the summer season and the winter period.’