Jet2.com has reported substantial growth – and agents are reaping the benefits. Ian Taylor reports
Jet2.com and Jet2holidays increased year-on-year commission payments to agents by 21% – more than £8 million – in the 12 months to March.
The rise in agency payments to £37.5 million a year was revealed in the annual results of Jet2 parent company Dart Group, which were published last week.
Agents ought to see a further substantial rise in the 12 months to March 2018 as Jet2.com has added considerable capacity – increasing its fleet from 65 to 73 aircraft for this summer – and plans a comparable increase in package holiday sales. The company dismissed fears of a downturn in outbound holiday demand despite the “unsettling” effect of Brexit, saying: “We believe the government recognises the importance of aviation, and European countries appreciate the value British tourists bring.”
Dart Group reported an annual pre-tax profit of £90 million, down 14% on last year, despite a 23% increase in revenue to almost £1.73 billion. Almost £1.6 billion of that turnover came from airline Jet2.com and Jet2holidays.
The company attributed the drop in profits to “considerable investment” in Jet2’s new operating bases at Birmingham and Stansted, and to a £10.9 million loss on foreign exchange following the sharp fall in the value of sterling in the second half of last year.
It conceded Jet2 had been forced to discount prices in the latter half of 2016 to hit growth targets after adding capacity, reporting: “Strong demand and resilient pricing for the summer 2016 season gave way to heavier price discounting in the second half of the year, to achieve planned growth.”
Average fares over the 12 months to March fell from £91.11 to £86.65. However, the average Jet2holidays package price remained roughly flat at £617, and revenue in the travel business rose 24% as a result of the increase in passengers.
Jet2 carried 1.73 million package holiday customers in the year, almost half (49%) of the airline’s total passengers and a 42% increase on the previous 12 months. Flight-only bookings hit 3.64 million.
The group reported a “satisfactory start” to the current year and forecast it would hit its profit forecasts “despite considerable uncertainty around Brexit”.
Dart Group executive chairman Philip Meeson said: “There remains considerable uncertainty around Brexit negotiations and the effect these could have on our freedom to fly and our customers’ ability to travel. This is unsettling. However, we believe the UK government recognises the importance of aviation services and European countries appreciate the value British tourists bring to their respective countries. We remain confident in the resilience of our leisure travel business in the long term.”
Meeson added: “We are encouraged by the increasing proportion of customers choosing our ‘real package holidays’, which are not easily replicated by non-specialists. More than 41% of our package holidays were sold on an all-inclusive basis.”
Jet2 began flying from Stansted on March 30, bringing its package holidays to the London market for the first time. It is offering 58 routes to Mediterranean and Canary Island destinations from Stansted and Birmingham.
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