Well, good morning everyone and welcome to this latest webcast that we're bringing you from Travel Weekly. And I'm joined once again by Steve Heapy, the CEO of Jet2.com and Jet2 Holidays. Hello, Steve. How are you?
I'm all right, thanks Lucy. How are you?
I'm really good. And you are joining us from yet another new base. I mean, there was a time when you were very sort of cautious and said you'd stay in the north and all of a sudden they're coming thick and fast.
Yeah, we're in Luton today. London Luton airport. Just seen our first flight away going to Morca on time, of course. So, very exciting. I've just had a bacon sandwich and some coffee. So, I'm feeling all right again.
You're feeling chipper now. I'm pleased we've got you when you're full. All right. So, obviously you announced that you were going to be opening at Luton back in November. This is your 13th base and it comes very quickly after Bournemouth. But at the time you announced it, you said you'd been asked for this for a long time. As you said, there was real demand for Luton.
We had from some of our customers that go to other bases and Luton was more convenient and from some people that hadn't booked with us before and from travel agents. They wanted us to expand our footprint and offer flights and holidays from here. We've got them on sale and so far the sales are going well and we had very full flights going this morning.
So, just remind us how many. You've added another 430,000 seats then to the program but from Luton and it's 36 weekly flights I believe to 17 destinations. Is that right?
That's correct. 36 flights a week. 430,000 seats. 17 destinations.
Well, I've got the press release in front of me. Yeah, I can. You've mentioned Morca. That was your first one. I think you've got Tenerife and also Antalya today. And then you have two Balearic Islands: Ibiza and Morca. Four Canary Islands: Tenerife, Gran Canaria, Fuerteventura, Lanzarote. We have three mainland Spain: Alicante, Girona, and Reus. We have three Greek destinations: Kefalonia, Rhodes, and Zante. We have the lovely Verona in Italy, Faro and Madeira in Portugal. And then in Turkey we've got Antalya and Dalaman. So hopefully something for everyone.
Yeah. Two of those destinations are exclusive to Luton, aren't they?
They are. Yes. So very exciting. Customers very happy this morning. We treated them to a breakfast. One lucky customer and her family won a holiday in a five-star hotel. We had a little draw thing, a little tombola thing. Great. So everyone went away happy and hopefully, well, not hopefully, definitely they will experience our award-winning service. No doubt you saw the TripAdvisor thing a couple of weeks ago saying we had the friendliest cabin crew in the UK.
Oh, good for you and well done for getting award-winning in and we're only 5 minutes in. So, excellent. Now you've got two new aircraft there. These are the Airbus Neos. And you've created 125 jobs as well in the region.
That's right. 125 direct jobs and no doubt there'll be more jobs created on the back of that indirectly. We've got two of our new aircraft, Airbus A321 Neo, more fuel efficient than the existing generation of aircraft, half as noisy, and we've got as you know an order for 146, $18 billion order, and we're very pleased to have them here at Luton.
So, this is obviously just an initial sort of foray. I guess the plan would be to grow this eventually if it goes well.
Absolutely, that is the plan. If you look at our other bases, we've got a history of growing pretty quickly and we very much hope to be able to do that here at Luton as well. There's certainly the demand there for our award-winning package holidays and flights.
Sorry. So encourageable. Try and do the whole interview without saying that from now on. Right. Let's see if that's even possible.
Okay, I promise I'll try not to say that we are multi-award-winning from now on.
Okay, that's it. I'm going to stop the interview if you do it again. Right, let's talk about demand then. That's important because you said sales had gone well. You obviously put it on sale at the end of last year for this summer. When you say gone well, what do you mean by that? Has it been across all those destinations? Has it been certain, you know, has it been the core summer or what? Or you sold well into winter?
I think everywhere's sold well. I mean, we did go on sale quite late because we only announced it what, five months ago and the other bases had 17 months to sell. So we've obviously had to work a little harder to fill the routes because we had pretty much a year less to sell them. But given the time we had, we think they've gone very well. And we had an aircraft full of happy customers this morning. And the other two flights will be going full later on this morning. So, yeah, very happy with it. Lucy, it's the first day, but nevertheless, it's hopefully the start of a long and successful story here at London Luton.
Yeah. Because you've got competition there, of course, haven't you? You've got Ryanair and Wizz and EasyJet and Tui. So, I mean, you obviously felt there was room for you as well.
Well, I think that's demonstrated by the fact that we're filling the aircraft. There definitely is the demand there. And I think people wanted our product and hopefully we will deliver the award-winning service to which they are accustomed. Now you put me in a spot because I don't really want to finish the interview and I threatened I would. It's like when you tell your kids you're going to do something and then you never follow through with it. I'm sorry, Lucy. You're like a naughty child.
Steve, I'll try harder. I know you're disappointed with me and I'm disappointed with myself.
Yeah. Well, I mean, but the thing is, look, let's just talk about that. You are there with some stiff competition and you're saying that people want your product. You have to keep evolving your product clearly to make sure they do come in and ask for yours. So, what are you doing to make sure that what you're offering is different to the other players coming out of that airport or anywhere else you've got competition?
Well, I think our package holiday product is differentiated obviously the service element. We've got our overseas customer helpers in resorts. Many holiday companies don't have those and those people help our customers make sure they have a great holiday. They're there to sort any problems, to help them with anything they want. And it's something that we're very proud of. Our customer service scores, customer feedback is very, very complimentary and it's something we'll keep doing. You've got to continually raise the bar higher.
Yeah. Because other people will, you know, you used to talk about your baggage allowance. Obviously, you've got your in resort check-ins and things like that, but other people then do the same sorts of things. So, how will you continue maybe through the rest of this year and into 26? How will you continue to make sure your offering is differentiated?
Well, you've got to keep looking at what you do. You've got to look at your customer satisfaction scores. See where people are complimentary about you. See where people are not very complimentary about you. Don't get all precious about it and upset when people complain. They're complaining for a reason. Look into it, find out the cause of the problem and fix it. And that's what we do. You've got to continually raise the bar higher.
All right. So, great news about Luton. I don't want to take away from that, but if we can talk about just the year in general, Steve, because I don't know how you've found it. You obviously added capacity, as did EasyJet. We spoke to them yesterday because they were opening Southend, and they were saying they were very comfortable with their increased capacity, but when I spoke to TUI, they were saying they were very pleased. They hadn't increased capacity because they said there was a lot still left to sell. So, where are you sitting on that? You did increase. Are you comfortable?
Yes, I am. I'm comfortable with where we are this summer. We have increased capacity across the board by 9%, roughly 5% of that is in the new bases. So like for like just over 4%, but I'm pretty comfortable with where we are. It's been a consistent sales period so far. You know, it was a bit tricky right at the start. It got off to a slower than normal but steady start and I think that's how I would describe it. It's been steady. So I'm pretty happy with where we are at the moment, Lucy.
Yeah. Okay. And so we've got agents though that are saying there is still a lot out there. They're anticipating obviously a stronger lates market, but they're saying they do expect tweaks in the pricing. They think there is going to be some discounts there. What's your view on that?
It depends really. If it's a late market then it may be the case that there is some discounting, but you have to be careful not to lead the market. If you start discounting too early then you condition people to expect discounting closer to your departure and it becomes a self-fulfilling prophecy that it's a late market. So people have to try and hold their nerve and not start a downward spiral of pricing, which of course isn't good for the industry because we all need to make profits to make sure we can invest in our companies in the future.
So, do you worry that other people may bottle it and they have to?
Well, you never know. I would hope that isn't the case, but you've just got to see how things pan out. Hold your nerve. It looks like it might be a late market. So don't jump too early.
Yeah. What are the alternatives if you weren't to reduce your pricing? Could you just build more in or what can you do to get the market moving and not actually create a price war?
Well, dropping the price should be one of the last things you do. If sales are slow, you should be marketing and trying to attract customers, try and persuade them to book a holiday, give them a reason to book a holiday. I mean, why wouldn't you want to go on holiday? The weather's not great. It's a bit depressing at the moment. There's not a lot of good news around. Why don't you get on holiday? Get a bit of sun and relax. And it's very consistent. If you look at some of the economic data and the Barclays monthly spending report, it's consistently said that people are not spending as much on lottery tickets, streaming services, nights out, etc., but holidays is still very consistent. I think we know now it's not a commoditized product anymore. It's an essential purchase. It's certainly an essential purchase for me. I need a bit of sun and I need to get away from things. And I think everyone else is the same. Holiday is so important and it's good for your health as well. I think we saw that during the pandemic that people really missed it and there were some studies that said having a holiday is actually good for your health physically and mentally. So why wouldn't you get away?
Yeah. You mentioned though that it's pretty depressing at the minute. I mean, we're doing this interview. It's the 1st of April. Or what some people are talking about, they're calling awful April. We've got all these increased costs coming in. Energy bills, the cost of living is going to be biting again a bit more. We've got the national living wage. So there's a lot coming down the line, Steve. Does that concern you at all in terms of whether people, I know you're saying a holiday is an essential, but it is going to create some issues for certain people, isn't it? In terms of their disposable income.
It could do. Yeah, it could do. We just got to make sure that we attract as many people as we can with the right products and the right pricing. But also something that's very important is the service we provide. People want value for money. It's not necessarily being the cheapest. You've got to provide great customer service as well. And if someone picked, for example, a multi-award-winning company with overseas customer helpers in resort, then that probably would make a big difference to them because they would ensure there's the quality there for what they're paying.
