Jet2 CEO Steve Heapy called on Chancellor Rachel Reeves to stop using the airline and holiday industry as a “cash cow”, warning that further increases in aviation taxes could hit low earners hardest and lead to families being barred from traveling abroad.
Heapy – operator of the UK’s largest package holiday operator and the UK’s third-largest airline by passenger numbers – said higher taxes would “inevitably” be passed on to passengers, driving up prices and dampening demand.
“As we all know, we cannot escape the basic laws of economics,” he said. “Increased prices could lead to a fall in demand, and that’s not good because the people who can’t afford a holiday will be among the lowest-income members of society. It would be a perverse outcome if flying became something for the rich and privileged.”
The warning comes as speculation grows that Reeves could turn to the aviation sector for additional revenue in next week’s Budget. Air passenger tax (APD), which is paid by almost every passenger departing a UK airport, was last increased in April and is set to rise again next spring. Current APD fares range from £14 for domestic flights to £224 for long-haul flights over 5,500 miles.
Heapy’s comments accompanied Jet2’s half-year results, which showed record revenue of £5.3 billion, up 5 percent on the previous year. Seating capacity increased by 8 percent to 16 million, partly due to new operating sites in Bournemouth and London Luton. Profit before tax (adjusted for exchange rate fluctuations) rose 1 percent to £780 million.
The airline reported a 16 percent increase in flight-only passengers to 4.7 million in the six months to September, reflecting an industry-wide trend of travelers booking much later than usual. Net ticket revenue fell 7 percent as Jet2 used promotional pricing to stimulate demand. The number of package travelers rose by 1 percent to 4.7 million.
Jet2 confirmed it expects full-year operating profit to be in line with consensus forecasts of £453m. The company’s financial year is heavily influenced by the summer period, with lower profits generally being achieved in the second half of the year.
The results offered reassurance after a profit warning in September, when Jet2 told shareholders that full-year adjusted profits would be at the lower end of market expectations due to limited forward guidance and more cautious consumer spending. In response, the airline removed 200,000 seats from its winter schedule and reduced total winter capacity to 5.6 million.
Despite the pressure, demand remains robust, Heapy said: “It’s clear that customers still want their well-deserved holiday in the sun, even if they book closer to their departure date.”
The update comes a week after Jet2 announced it would begin flying from London Gatwick in March 2026 after securing slots for six aircraft. The move will allow the airline to gain a foothold at the UK’s second busiest airport. But analysts expect it to face stiff competition – particularly from easyJet, which has more than 70 aircraft based there.
Jet2 expects its new Gatwick operation to be profitable by 2029.
