During Jet2’s Annual General Meeting, Philip Meeson, Executive Chairman, confirmed that the airline expects demand for its summer 2021 schedule to be similar to its 2019 numbers. Meeson confirmed that demand was already starting to grow but that bookings tended to be last minute. However, the airline has managed to operate flights to 40% of its usual destinations for August and will increase its winter schedule over the coming months.
Bucking the negative trend, which predicts several years of recovery for the airline industry, Jet2 is looking to recover by next summer. In a statement, Meeson said,
“For Summer 2021, we plan to fly to all our popular leisure destinations with an appropriate, tailored level of service, which we anticipate will be close to Summer 2019 seat capacity levels.”
He also confirmed that the airline would ramp up its winter 2020/2021 schedule as demand increases to grow. However, this doesn’t mean revenues will follow. Jet2 has said that it is seeing shorter lead times when it comes to bookings. Passengers don’t yet have the confidence to book in advance and are booking last minute where possible. The airline is blaming changing government restrictions and spikes in cases around the world for the shorter than usual booking times.
Jet2 will therefore attempt to ensure pricing for flight and package holidays remains “consistently enticing” right up until the plane is fully booked or ready to fly. The airline’s positive outlook is a first for the industry and a breath a positive fresh air.
Business or leisure
Jet2’s revelations could indicate a substantial market for leisure travel compared to business markets. The pandemic has proven to many that working remotely is an option. As such, we may see a slower increase in travel demand for business options as professionals choose to remain static and attend meetings online.
Jet2’s optimism may be a sign that leisure carriers will see a faster recovery than other airlines. Business travel remains essential for some sectors but for many, it will be an unnecessary risk over the coming years. Leisure travel, while optional, may see a faster rebound as people are looking to escape isolation at home.
Lower revenues
Of course, this doesn’t mean leisure carriers should expect to see revenue at similar levels to 2019. Business travelers tend to opt for first and business class tickets. This means that although they are fewer of them, they account for a disproportionate amount of overall revenue. With fewer business travelers and more leisure passengers, airlines may find that economy is packed while first class has seats to spare.
For carriers like Jet2, who don’t have this issue, a quick rebound will mean more flights, but not as many revenues. Unless, of course, the need for a holiday is so great, passengers are willing to pay higher prices for tickets.
For regional and short-haul carriers, the rebound may be quicker still. The caution passengers are displaying when booking may be reflected in the choice of destination as well. Travel advice is changing very quickly, often not giving travelers enough time to return home. We may see a reluctance to travel far from home while conditions are so unstable.
What do you think of Jet2’s optimism? Do you think leisure travel will recover by next year? Let us know your thoughts in the comments.
