Jet2 PLC flys past Tui to UK tour operator top spot

Jet2 PLC (AIM:JET2) has overtaken Tui to become the UK’s largest tour operator for the first time after it increased its package holiday capacity for the year ahead.

Jet2holidays, a subsidiary of Jet2 and counterpart to the group’s low-cost airline, has gained licences to provide holidays for up to 5.9mln people annually, according to the Civil Aviation Authority, compared to Tui’s capacity of 5.3mln.

Capacity has been increased by around 600,000 due to a resurgence in demand seen across the aviation industry over the last year with trips now offered to 65 destinations.

Steve Heapy, chief executive, suggested independent travel agents had been vital for Jet2’s growth since its maiden flight in 2007.

“The loyalty of those independent travel agency partners has been absolutely integral to our growth and success,” he said, “I can promise we will repay that faith by continuing to focus resolutely on our partnership approach to working with independent travel agents”.

Tui is set to report first-quarter results on Tuesday, with analysts suggesting the German holidaymaker would likely publish a mixed set of results as it continues repaying aid sent by the government during the pandemic.

Jet2 updated that bookings had strengthened throughout December and January, with package holidays making up around 60% of its winter departures.

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Airbus Secures $3.9 Billion Order From UK Airline and Tour Operator Jet2

Skift Take

This strategic order guarantees a much larger fleet in the next decade, and is as strong a signal as any that the travel company predicts demand for package vacations will just keep growing and growing.

British travel company Jet2 said it ordered 35 new Airbus A320neo aircraft worth $3.9 billion at list prices, with an option to extend this to 71 aircraft, as it bets that demand for package holidays will keep growing.

The new order follows Jet2’s deal to buy 36 slightly bigger A321neo in 2021, its first purchase from Europe-based Airbus after it switched loyalties from U.S. planemaker Boeing.

Jet2 said in its statement on Tuesday that the initial 35 aircraft are due to be delivered between 2028 and 2031 and that it had negotiated a significant discount from the list price. It said it planned to finance the aircraft from internal resources and debt.

The new deal brings Jet2’s total number of firm ordered aircraft to 98, with the potential to extend this to 146, which it said would help grow the business as well as refresh its existing fleet.

Despite severe economic headwinds, airline and holiday bosses have recently said that consumer appetite for travel remains strong.

Jet2 specializes in package holidays, all-in deals involving flights, hotels and sometimes meals, and these tend to gain in popularity when people tighten their belts as they offer certainty over prices. The Leeds-based company said it was confident about future demand.

“The order reflects our confidence that we have a much-loved product built on sector leading customer service which we can continue to grow,” said Jet2 executive chairman Philip Meeson.

Jet2 said the deal gave it certainty of supply of aircraft into the next decade.

(Reporting by Sarah Young; editing by James Davey)

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