Jet2, CEO, Steve Heapy at the CAPA Airline Leader Summit World 2025

Transcript

Steve Heapy:We've been trying to get into Gatwick for a number of years and we couldn't because it's a very busy airport, as you know, the busiest single runway airport in the world. So we've been able to get the right number of slots we wanted to start an operation. The airport made some infrastructure adjustments which resulted in some additional runway movements. And we applied for those slots through the normal process, through the Independent Slot Coordinator, and were awarded slots for 6 aircraft, 5 based and 1 overseas-based aircraft. So we built a programme, it's on sale, we start operating from the 26th of March next year, and we're looking forward to it. We don't intend on stopping at 6 aircraft. We hope we can continue to grow in Gatwick Airport. It's a huge catchment area. It's a relatively untapped market for us, and I think there's a lot more we can do there. Yeah, so we'll certainly be trying to grow in the future. These bases take time to mature. You have startup costs. You've got to market ahead of the startup. You've got to recruit people ahead of the startup. We're starting a long way behind in terms of our sales curve. It's gone on sale over a year later than our other bases, so you have to make an investment to get established and fill the aircraft in the. First couple of years. We don't consider ourselves a northern airline now. We are truly a national airline. You are right, in 2017 we launched Birmingham and Stansted Airport, so that gave us the, you know, the other bit of the Midlands and the south. And since then, yeah, Bristol, Luton, Bournemouth, and now Gatwick. So we represent pretty much the whole country. In fact, our catchment area represents 90% of the population. We offer a different product. Ryanair offer their product, which is, you know, the lowest cost, and it's a very successful product. We offer customer service, and some people are attracted to that. We offer the holidays product, the integrated holidays product, Jet2 Holidays, and some people want that. So I think it shows that we, we can be competitors but have quite a complementary product as well, and we can coexist in the same base together. We've got 15 years of experience doing this, 15 years of history, 15 years of awards and being the best in the industry. And we're confident that we will fill our aircraft with happy holidaymakers. We've got the reputation. We've had lots of people in the Gatwick catchment area that have been requesting that we start our operation there. The airport was requesting we start the operation. We have done, and we're very pleased with the initial results. We've always said somewhere between 55% and 65% of capacity, 60%, 70% is about the right number, and we're happy with that. It does vary depending on the trading conditions, etc., and that's the strength of our model. We can turn the tap on flights only or turn the tap up on holidays depending what the demand is and from which type of customers. I think it's important you offer both types of products and you do have a flexible model. I think to have a target set in stone would be probably the wrong thing to do. We've got an order of 155 Airbus A321neo aircraft, the cleanest, quietest aircraft in its class. We've currently got 23 in the fleet and the order will take us up to 2035. So there's a long way to go yet. We'll be receiving on average 10, 12 aircraft per year into the fleet. So some will be replacing aircraft that will be retiring and others will be for growth. But that's a very flexible model. We can always retire aircraft at a slower rate if there's an opportunity there, or we can do the opposite. So we're in a very good position. We've got the order that we signed during COVID And the secured pipeline of aircraft up until 2035. So it's been a very good order for us and we're looking forward to receiving more. We have to work very hard on filling our aircraft. There is a seat rate, but there's just no point letting that evaporate by not filling the aircraft. So we have to accept that we've got bigger aircraft there. They're more economical, they're quieter, and we've got to make sure we fill it just as we made sure we filled the smaller aircraft before. So the model doesn't change. You have an intake curve that ends up filling the aircraft and you have to make sure you stay on there. I have a face full of wrinkles. I look like George Burns, who's been dead about 20 years. And on a serious note, everything. There's geopolitical events going on. We've got the economy in the UK, economies in Europe from where we buy our hotels, still lots of inflation in the system. You just never know what's around the corner. But that's what makes the airline industry so exciting. If every day was the same and boring, then it wouldn't have the same appeal. So it's a very, as you know, a very exciting industry, but you never have a normal year. Nobody in the airline industry knows what a normal year is, but you have to keep on your toes. You've got to try and anticipate what's going to happen and be ready for the things that you didn't anticipate. they will happen also. We've got a successful model. There's other destinations within our sphere of operation we could do. We've got plans to launch more destinations. We just announced Egypt last week. And I think there's a lot more we can do in terms of finding new customers in the UK, converting more customers from flights only to holidays, and maybe going to more destinations. The A321 is a very versatile aircraft. It's got quite a long range and There's lots more we can do.

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