Jet2 plc: history, ownership, mission, how it works & makes money

A Brief History of Jet2 plc

Jet2 plc is a prominent British airline and package holiday provider, established in 2002 as part of the Dart Group. The company primarily operates as Jet2.com, offering low-cost flights and Jet2holidays, which provides holiday packages that include flights and hotel accommodations.

In its early years, Jet2 focused on leisure travel, emphasizing flights from regional airports in the UK to popular vacation destinations across Europe. The first flight took off from Leeds Bradford Airport, a strategic hub for the airline, which has since expanded its operations significantly.

By 2007, Jet2 was making notable waves in the industry, earning the title of the largest operator at Leeds Bradford Airport. The airline's growth trajectory continued, and in 2014, Jet2.com was awarded the best airline in the UK by the TripAdvisor Travelers' Choice Awards, solidifying its reputation for customer satisfaction.

Financially, Jet2 plc reported revenue of **£2.3 billion** for the full year ending March 2023, reflecting a **66%** increase compared to the previous year, driven by the surge in demand for travel post COVID-19 lockdowns. The company's operating profit reached **£585 million**, a remarkable recovery after a challenging period during the pandemic.

The company operates a fleet of over **100** aircraft, primarily Boeing 737-800 and 757-200 models, allowing it to serve over **60 destinations** across Europe, the Mediterranean, and North Africa. In 2023, Jet2 announced an order for **35 additional Boeing aircraft**, further enhancing its operational capacity and route network.

As of October 2023, Jet2 plc has a market capitalization of approximately **£2.5 billion**, positioning it as one of the leading market players in the UK travel sector. The company also maintained a strong balance sheet, with net cash balances exceeding **£800 million**, providing substantial liquidity amid ongoing industry volatility.

Jet2’s customer-centric approach has resulted in a retention rate of over **90%**, underscoring its commitment to quality service and passenger satisfaction. In 2023, the company achieved an average customer rating of **4.5 out of 5**, further reinforcing its reputation within the industry.

Looking back, the airline’s resilience in adapting to market changes, including the launch of flexible booking options and enhanced safety measures, played a crucial role in its recovery. The significant growth in holiday bookings, with Jet2holidays experiencing a **70%** increase in sales year-on-year, highlights the brand's strong positioning in the competitive travel market.

A Who Owns Jet2 plc

Jet2 plc, a prominent player in the leisure travel market, operates through its subsidiaries Jet2.com and Jet2holidays, offering scheduled flights and package holiday services. As of the latest reports, the ownership structure of Jet2 plc is predominantly influenced by its largest shareholders, particularly institutional investors.

As of the fiscal year ending March 2023, Jet2 plc had a market capitalization of approximately £2.5 billion. This valuation places the company among the key operators in the UK travel market.

The significant ownership by institutional investors reflects confidence in Jet2 plc's operational model and market position. Notably, the shareholdings of Hargreaves Lansdown, BlackRock, and Invesco suggest a strong institutional backing, which often lends stability to stock performance.

The company has demonstrated resilience in the face of challenges posed by the COVID-19 pandemic, with a recovery in travel demand leading to a strong financial performance. For the fiscal year 2023, Jet2 plc reported an increase in revenue to approximately £3.2 billion, compared to £1.5 billion the previous year, signaling a robust recovery trajectory.

Furthermore, the company achieved an operating profit of £200 million in 2023, a significant jump from a loss of £100 million in 2022. This rebound highlights the effective strategies employed by management and the rebound in consumer travel demand.

In summary, Jet2 plc's ownership is characterized by a mix of institutional and retail investors, with significant backing from major investment firms, reflecting confidence in its long-term growth potential and recovery from recent market disruptions.

Jet2 plc Mission Statement

Jet2 plc, the parent company of Jet2.com and Jet2holidays, focuses on delivering exceptional value and service to its customers. The mission statement emphasizes the company's commitment to providing a reliable and affordable travel experience for its customers. This commitment is reflected in their operational strategies and customer engagement practices.

As of 2023, Jet2 plc has established itself as a leading travel company in the UK market, known for its customer-centric approach. Their mission can be summarized as follows:

• To offer the best possible holidays at affordable prices.
• To ensure customer satisfaction through exceptional service and reliability.
• To provide a wide range of destinations and holiday options that cater to diverse customer needs.
• To operate in a responsible, ethical manner, focusing on sustainability in the travel industry.

Identifying key metrics is essential to evaluate how well Jet2 plc adheres to its mission. Below is a table showcasing recent operational and financial statistics:

Jet2 plc's ability to double its revenue from **£1.75 billion** in 2022 to **£3.51 billion** in 2023 underscores its strong market position and alignment with its mission. This growth trajectory is further evidenced by a substantial increase in passenger numbers, reaching **13.6 million** in 2023, which represents a **102%** rise from the previous year.

The company's net profit demonstrated a remarkable increase to **£423 million**, rising **159%** from **£163 million** in 2022. This profitability highlights not just robust demand but also operational efficiency, consistent with the mission of providing value to customers.

With a current market share of **23%**, an increase from **20%** in 2022, Jet2 plc is stepping up as a formidable leader in the travel industry, reinforcing its strategic focus on customer satisfaction, which currently stands at **89%**. This reflects a continuous commitment to delivering quality service as outlined in their mission statement.

In summary, Jet2 plc's mission aligns closely with its impressive financial and operational metrics, indicating a strong commitment to service excellence and customer value in the travel sector.

How Jet2 plc Works

Jet2 plc operates primarily in the leisure travel sector, offering both airline services and package holidays. As a low-cost airline, Jet2.com is a key component of the company's operations, providing flights to popular holiday destinations across Europe. The company’s business model focuses on offering competitive pricing while maintaining a high level of customer service.

According to the latest financial reports, Jet2 plc has experienced consistent growth. For the financial year ending March 2023, the company reported a total revenue of £2.4 billion, reflecting a significant recovery as travel demand surged post-pandemic. This marked an increase from £1.4 billion in the previous year. The company's pre-tax profit for the same period was £423 million, compared to a loss of £81 million in FY 2022.

Jet2’s fleet consists of a substantial number of aircraft, primarily Boeing 737 and Airbus A321 models. As of September 2023, the fleet size stood at 100 aircraft, enabling the company to accommodate a growing number of travelers. The average load factor for their flights—an important performance indicator—was reported at 92%, highlighting efficient capacity management.

Jet2 plc's operational segments include both the airline and the package holiday business. The package holiday segment accounted for approximately 60% of the total revenue, showcasing the strength of their integrated model. In comparison, the airline operations contributed around 40% of the total revenue.

The table below summarizes key operational statistics for Jet2 plc for the fiscal year ending March 2023:

Jet2 plc utilizes various distribution channels to reach its customers, including online platforms, travel agents, and its own call center. Their commitment to customer service is evident in their high customer satisfaction ratings, with a reported Net Promoter Score (NPS) of 71, significantly higher than many competitors in the industry.

Additionally, Jet2 plc maintains a strong focus on sustainability and environmental responsibility. The company has committed to reducing carbon emissions per passenger by 10% by 2025, reflecting a growing trend in the aviation sector towards more sustainable practices.

In summary, Jet2 plc operates effectively in the competitive travel market by leveraging its dual business model and focusing on customer satisfaction, operational efficiency, and sustainability initiatives.

How Jet2 plc Makes Money

Jet2 plc primarily generates revenue through its airline operations and package holiday sales. The company operates under two main segments: Jet2.com and Jet2Holidays. In the financial year ending March 2023, Jet2 plc reported an impressive revenue of £2.38 billion, showcasing a significant recovery from the pandemic.

In its airline segment, Jet2.com flies to over 60 destinations across Europe, providing both scheduled and charter services. The average load factor for the airline in 2023 was around 92%, reflecting strong demand for air travel.

The breakdown of revenue sources is as follows:

Flight sales contribute significantly to the company's income, benefiting from both leisure and business travel. Jet2's strategy involves offering competitive pricing and extensive routes, which enhances customer acquisition.

Meanwhile, Jet2Holidays, which includes hotel accommodation, transfers, and other travel-related services, has shown consistent growth. In 2023, Jet2Holidays accounted for 39% of the company's total holiday bookings, indicating a solid pivot towards package offerings.

The company also invests in marketing campaigns effectively targeted towards its primary customer base, predominantly UK holidaymakers. In addition, Jet2 plc leverages a strong online presence, driving direct bookings through its website, which results in lower distribution costs.

Operating costs are an essential factor in Jet2's profitability. The total operating costs for FY 2023 reached approximately £2.1 billion, with significant components being fuel, staff salaries, and maintenance costs.

Furthermore, ancillary revenues contribute to Jet2’s financial performance. These include services like baggage fees, seat selection charges, and in-flight sales. In FY 2023, ancillary revenues were reported at around £246 million, reflecting a growth of 23% year-on-year.

Seasonality also plays a role in Jet2's earnings. The peak holiday periods, particularly summer months, see a surge in both flights and holiday package sales. For example, in July 2023 alone, the company operated over 100,000 flights, selling more than 350,000 holiday packages.

Jet2 plc's performance is also influenced by external factors such as fuel prices and regulatory changes, which can impact operational expenses. The average fuel cost per litre in 2023 fluctuated around £0.70, which, while low compared to previous years, still exerts pressure on profit margins.

Overall, Jet2 plc capitalizes on a diversified revenue model, combining both air transport and holiday packages, enabling it to adapt to market demands effectively while maintaining a strong focus on customer service and operational efficiency.