Back in the 1990s and 2000s, two names dominated bucket-and-spade holidays flying from northern airports: Airtours and Sunset.
The latter no longer exists, while the former is still around under the Thomas Cook umbrella as a cheap and cheerful brand but is a shadow of its former self.
In their wake, they left a gap for a northern operator able to build loyalty through regional departures that the big charter airlines were often reluctant to commit to. Ask any agent which brand filled that gap and they will name Jet2.com and its package sister company Jet2holidays.
Jet2 is part of the Dart Group, a freight company that operated from the south coast in the early 1980s, transporting fresh flowers and Royal Mail parcels overnight with a small fleet of aircraft branded as Channel Express.
Jet2 was born at Leeds/Bradford 11 years ago when each morning the freight came off and in went rows of seats.
Starting with two aircraft, Jet2 now has 50 in its fleet, with other bases at Belfast International, Manchester, Newcastle, Blackpool, Edinburgh, East Midlands and Glasgow.
“The airline’s summer passenger loads are more akin to a charter airline than a low-cost carrier”
Originally envisaged as just a budget airline, since 2007 Jet2 has slowly but surely grown as a package brand as well, currently serving 43 destinations among 57 in total.
One early trick that set the airline apart was its decision to buy Boeing 757s. These are capable of crossing the Atlantic, so Jet2 can offer Christmas shopping packages to New York, something no other budget carrier or charter airline does.
A look at Dart Group’s facts and figures underlines the Jet2 brand’s success. The airline’s summer passenger loads are more akin to a charter airline than a low-cost carrier. Last summer (the April-September period) they reached 92.5%, whereas normal budget airlines hover around 85%. This is an impressive achievement, with passenger growth outstripping capacity growth of 12%.
Growth opportunity
The package business is helping to drive this: in 2012-13 Jet2 flew 4.84 million passengers, an increase of 13% year-on-year. Jet2holidays provided 418,000 of these, nearly double the previous year’s number, with revenue growing 110%.
Investment firm Morgan Stanley pinpoints Jet2 as the only tour operator in the UK market that sees 2014 as a real growth opportunity. Jet2holidays has increased capacity by 14%, outstripping summer 2013’s 12% growth.
It is licensed by the CAA to carry almost 1.2 million Atol-protected passengers this year, making it the clear number three operator behind Tui and Thomas Cook. It is Cook’s mainstream brand that should be worried.
“The only operator that continues to add capacity aggressively is Jet2.com, which has nearly doubled since 2009 and it is now just 10% smaller than Thomas Cook,” Morgan Stanley said in an analysts’ briefing.
Jet2 has seen the opportunity and seized it. Morgan Stanley said that tour operating capacity during the past three years had been “reasonably constrained”. It added: “The only brands to have shown real growth have been the budget carriers, with easyJet increasing capacity by 4.5% and Ryanair by 6.6% in 2013.”
How long the growth opportunity will continue after May, when easyJet begins its partnership with Hotelopia with the stated intention to become the number three Atol package company, remains to be seen. Morgan Stanley is wary. “Capacity could be a problem in coming years as tour operators and low-cost carriers regain confidence,” it said.
