//Spotlight on: Jet2.com and Jet2holidays

Spotlight on: Jet2.com and Jet2holidays

Sam Ballard hears how the business has rapidly expanded, now occupying a prominent position in the UK travel market.

It is one of the industry’s biggest success stories: from a temporary cabin at Leeds Bradford Airport in 2002 to the third largest airline in the UK. Add to that a tour operator which only launched in 2007, and is already the second largest in the UK, and you can see why Jet2.com and Jet2holidays are worthy of such hyperbole.

“Ultimately, we see ourselves as a customer service organisation,” says Stephen Heapy, the CEO of Jet2.com and Jet2holidays. “We want to invest in that experience. If you look after the customer, they look after you by booking again. We are obsessed with customer service.

“We keep our prices as low as possible. We might not make as much margin as we could do, but we know that people’s budgets are stretched. The average salary in the UK is £26,000 and that’s before tax – take tax off, take mortgages off, take car loans and fuel off and people don’t have a lot of money left over. We’ve got £60 deposits and we try and give customers good value for money.

“It has to be simple because Alan Cross [Jet2holidays’ head of trade] and I are very simple people and we need simple messages that both of us can remember.”

The message is clearly getting through. At the 2018 Jet2 VIP Conference, Heapy revealed that the company’s revenue had increased by 38 per cent year-on-year, with profit up 13 per cent. The airline will have 103 aircraft next year – 34 of which are new – operating out of nine UK hubs. That growth comes amid one of the more turbulent years in Jet2’s history, with the looming threat of Brexit and a stuttering economy casting a shadow over much of the travel industry.

“One thing that concerns me [about Brexit] is the uncertainty,” Heapy adds. “It’s already caused some major issues – primarily the collapse in sterling making things like fuel and accommodation more expensive. The more that uncertainty continues the more likely it is that people will delay their holiday purchase. There’s not much sign of that so far, but the longer the uncertainty continues the worse it could potentially get.

“I’m quite confident that we’ll get the things we want from Brexit. The most important thing is the third and fourth freedoms – the right to fly to Europe from the UK and to the UK.”

One of the biggest success stories in Jet2’s history has been its ability to develop Jet2holidays to the extent that
it has. The most recent Atol figures put the number of passengers Jet2 is licensed to carry at 3.8 million. However, what’s even more impressive has been how the company has positioned its airline, Jet2.com, to feed the business. The numbers don’t lie: when it started back in 2007 only two per cent of Jet2.com’s passengers were Jet2holidays customers. That number is now 49 per cent.

“They’re one company,” explains Heapy. “I run both the tour operator and the airline. They are totally integrated and decisions are made for the good of both. We are not an airline or a tour operator – we’re a leisure travel business. It’s quite a simple thing, really. The airline supplies the seat and the tour operator buys seats off the airline. Why wouldn’t you have it all integrated?”

One of the approaches that Jet2holidays is perhaps most renowned for is its approach to the trade, which currently makes up around 25 per cent of its overall bookings. The company paid out about £70 million in commission [January to November] on 824,208 holidays booked by travel agents. In terms of revenue that is more than £570 million worth of business.

One of the greatest examples of Jet2holidays’ commitment to the trade comes in the form of its annual VIP conference. The 2018 incarnation, the company’s fourth, was also its largest, with 270 independent travel agents flown to Turkey in November.

“Jet2holidays was a direct operation for a year,” explains Alan Cross, who joined the company 10 years ago. “It’s more complicated to go to the trade – you have to build a separate website and so on, and we did all that. However, what’s been proven over that time is that our trade bookings are incremental, rather than an alternative business. Trade is 25 per cent of our overall bookings, but if we pulled it tomorrow the direct side could not pick it up. The relationship and support that we have with the trade is fantastic.

“We’ve got over 1,000 agents who book us,” he adds. “Half book us because of the stock we’ve got out of their bases and the other half proactively go out and bring in more business than what walks in through their door. That’s where our marketing support comes in.”

It was at the 2018 VIP Conference that the tour operator unveiled its latest initiative: how agents can become Jet2holidays specialist travel agencies. The scheme involves setting up a customisable ‘booking pod’ within a store, letting customers know that their agent is an expert in all things Jet2holidays. If agents have the booking pod in their store they will have access
to more joint marketing and bespoke training programmes.

“Outside the shop it will say that this is a Jet2Holidays Specialist Booking Centre,” Cross explains. “At first we thought we would start decorating walls but it’s messy and agents don’t want that. It’s imposing. If you say you will build a flexible pod that will suit the shop inside it is much better. It’s an experience that the customer can identify with: ‘That’s where I book Jet2holidays’.

“Then you back that up. Agents have badges on identifying them as a Jet2holidays specialist. Every four-to-six weeks there will be training bringing them up to speed – we might bring suppliers like Hard Rock in to the store. So, they will be a real specialist. We will guarantee them at least one fam trip a year. They are also guaranteed access to our mobile travel agency at least once a year, too, which they can take to events. There will also be joint marketing initiatives. It might be a bus stop that tells people there is a travel agency 100 metres down the road.

“We did a lot of this before, but now we’re creating a checklist and bringing it all under one name.”

Judging by the almost feverish support that Jet2holidays garners from the agents at its conference, it’s little wonder that bookings are looking so strong. And, in these times of uncertainty, perhaps more people will seek a bit of escapism on a package holiday.

ABTA Magazine – January 2019

The January 2019 issue of ABTA Magazine is the fifth created by Waterfront Publishing.

With an exciting new look, feel and ethos, the magazine has a renewed focus on industry news. In this issue, ABTA shares its 12 destinations for 2019; Karl Cushing considers the rise in all-inclusive holidays; Jane Archer explores innovation in the cruise industry; plus, there’s an exclusive interview with Intrepid Travel CEO James Thornton. Click on the cover to read the magazine in full or subscribe here.