Sterling’s slide following the UK vote to quit the European Union is reviving demand for package holidays as Britons seek to avoid the uncertainty of paying in euros for accommodation, airport transfers and meals.
Demand for all-inclusive trips, which waned with the emergence of low-cost airlines in the 1990s, is increasing as the pound’s 15 percent slump against the euro this year encourages people to fix the price of their break before leaving home, figures released Thursday by British leisure carrier Jet.2 suggest.
The number of package holidays booked with Jet2 surged 36 percent in the six months through Sept. 30 just as flight-only sales fell 5 percent, the airline’s owner Dart Group Plc said in a statement. Package customers now represent 50 percent of those flown, up from 42 percent a year earlier.
Dart said that while the weaker pound might lead to upward pricing pressures, it’s confident in the resilience of leisure travel and “encouraged” by the higher proportion of clients opting for packages. First-half operating profit rose 14 percent to £167.5 million ($180 million), while winter bookings are in line with expectations and full-year targets should be slightly exceeded, it said.
Jet2 has taken a bullish view of the post-Brexit vote environment, announcing Sept. 21 that it would open a base at London Stansted Airport next March, taking on discount giant Ryanair Holdings at the Irish carrier’s biggest hub. Jet2 will serve 21 European destinations from Stansted using six new Boeing Co. 737-800 jets.
While most European vacation providers are part of specialist tour operators such as TUI AG and Thomas Cook, Jet2 was established as an airline and added a holiday business only in 2007. Almost 40 percent of its packages are sold as all-in deals aimed at families on a tight budget and include flights, transfers, meals, alcohol for adults and treats for children.
The carrier has previously focused on northern Britain, with its headquarters at Leeds-Bradford Airport and nine existing bases including Glasgow, Manchester and Newcastle upon Tyne. Ryanair is deploying 50 jets due this year outside the U.K. in light of what it predicts will be a Brexit-inspired travel slump.