Jet2, a leading tour operator and airline, suggests that the surge in holiday prices post-pandemic may be starting to slow down ahead of the summer season as competition in the sector increases. According to the company, even though there has been “a modest increase” in cost for summer trips compared to last year, deals are becoming “more competitive, particularly for April and May departures”.
In its latest trading update, Jet2 stated that bookings for package holidays and flight-only options have seen an increase by 13% and 18% respectively compared to the same period last year. This news might ease concerns of consumers fearing another round of dramatic price hikes for vacations this year. Back in November, Jet2 reported a rise of 11% in the average price of their packages; some airlines had even recorded a staggering 26% increase last summer.
According to analyst Russ Mould at AJ Bell: “This could be a sign that the pricing power enjoyed by the sector, with people prepared to pay whatever it takes to get their week in the sun, is starting to ease.” Despite these updates, Jet2 shares dipped 5% on Wednesday morning following investor concerns over the firm’s pricing remarks.
On a brighter note, the group mentioned strong demand for the peak season, having sold more than half its plane tickets and package holidays for the summer season. Further, they announced the availability of 12.3% additional seats than last year, bringing the total to 17.1 million.
Jet2 has revealed that it has already purchased 90% of its fuel for the upcoming season, and over 80% for the entire financial year. This means it is less vulnerable to any potential Middle East tensions that could impact oil prices. Oil prices, which had surged last week due to concerns about escalating conflicts between Iran and Israel, have recently dropped as tensions seem to be easing.
Jet2, however, remains “mindful of the current macro-economic and geo-political environments and how these may impact future consumer spending”. The airline stated that with nearly half of the summer tickets still available, it cannot provide guidance on the full year 2024-25. Nevertheless, it anticipates a pre-tax profit for the year ending March 31, 2024, to be about one-third higher than the previous year, ranging between £515 million and £520 million.
Jet2’s chief executive, Steve Heapy, said: “Although still very early in full-year 2025, we remain confident that customers will continue to travel with us from our rainy island to the sun spots of the Mediterranean, the Canary Islands and to European leisure cities.”
