Chief executive Steve Heapy tells Lucy Huxley how the operator responded swiftly
Steve Heapy was in the Jet2holidays office by 3am on Monday September 23 – less than an hour after the Civil Aviation Authority confirmed rival Thomas Cook had collapsed.
First of all, he wanted to help with the repatriation of stranded Thomas Cook passengers overseas – which Jet2.com did. And by the end of the day, the airline and operator had also put in extra capacity for October and winter 2019-20. By the end of the Wednesday, it had added extra capacity for summer 2020.
The additional capacity was part of a planning scenario Heapy had put in place in the event of Thomas Cook’s failure.
“Thomas Cook was in a vulnerable position for some time and as any responsible business should do, we made plans as to what we would do in the event of one of three scenarios: that Thomas Cook could materialistically change, be taken over or cease to exist,” he says.
“It’s not that we hoped they would fail but we had to plan for each outcome – and the fact that we did meant we could react as fast as we did.
“It would have been very difficult, or impossible, to execute our plan from Japan,” he adds, in a playful dig at executives who jetted off to the Abta Travel Convention in Tokyo in the immediate aftermath of the failure. “Business comes first.”
Jet2holidays has been adding more capacity since – putting on extra flights from its nine bases, and extra aircraft out of Manchester, Birmingham and Stansted. This has been on existing routes, and seven new destinations: Preveza, Skiathos, Lesbos and Kalamata in Greece; Zadar in Croatia; Innsbruck in Austria; and Tivat in Montenegro.
The extra capacity means there will be 110 aircraft flying next summer, 10 more than this year. One suspects there is more to come.
Preveza and Zadar were already on sale before Thomas Cook went bust, but Heapy says plans to launch the other destinations were “accelerated” in the wake of the failure.
Filling a gap
“The unfortunate demise of Thomas Cook created a gap that many customers wanted us to fill,” he says.
In total, Heapy says he has raised capacity by about one million passengers.
It is understood Tui has added roughly the same, while easyJet Holidays last week said it was hoping to sell at least a million package holidays next summer (its latest Atol is for just shy of 800,000). But Heapy is not fazed by others’ responses.
“Tui has added capacity, but some of that is long-haul, some is medium-haul and some is from bases we don’t fly from. We will give it time to see how the capacity shakes out, but I am confident about our future – and about summer 2020 especially.
“We are winning and welcoming lots of new customers. It would be untrue to say our booking numbers hadn’t increased since the collapse of Thomas Cook.”
Just last week, Jet2.com and Jet2holidays’ parent company, The Dart Group, posted interim results which saw profits up by 2% to almost £340 million, with annual income forecasts expected to be “significantly exceeded”, no doubt in part due to the extra business coming through.
Asked if he was ever tempted to pick up some of Thomas Cook’s slots at Gatwick, Heapy replied: “No. We were never tempted by Gatwick. What we wanted to do was concentrate on putting more capacity and more flights into our existing bases because we received feedback from our own customers that they wanted us to do more.”
Flying out of Gatwick would have pitched Jet2holidays against easyJet Holidays, which relaunches next month, promising the most-flexible package holidays in the market.
Heapy says: “Competition is good. It makes prices better for consumers and improves quality. But this flexible holidays thing it is claiming doesn’t worry me because we invented the flexible duration, fully-protected, package holiday 10 years ago.
“I was a little confused when I read the announcement as it’s nothing new, different or exciting. We’ve been doing it for years.”
Heapy has also snapped up some of Thomas Cook’s hotels over the last six weeks. “We were inundated with calls from hotels that wanted to work with us but couldn’t due to their Thomas Cook contracts, and so we have signed and welcomed a large number into our portfolio to work as true partners in our business,” he says.
But he added that he was careful not to sign more hotels than needed. “I didn’t want to dilute the volumes we were supplying to existing loyal hotel partners and, unlike other operators, we don’t sign hotels on an exclusive basis just to stop other operators getting rooms,” says Heapy.
Happy for Hays
Jet2.com and Jet2holidays have also given jobs to many Thomas Cook employees – from pilots, cabin crew and ground staff to call centre advisors, with some being taken on in its head office in Leeds.
Heapy is also happy that so many experienced Thomas Cook agents have been snapped up by Hays Travel, which bought the leases to Thomas Cook’s 555-shop network.
“Now they are out of a vertically-integrated structure, they will have the flexibility that independent agents have, and the freedom to pursue the correct commercial strategy for the retailer,” Heapy says.
“We have already heard from so many former Thomas Cook agents who, now they are with Hays, are delighted to be able to sell us.”
Heapy described John Hays as “an incredibly astute and courageous businessman” and said he thought the opportunity to take on the Thomas Cook shops and deliver great customer service as truly independent agents, was “a very smart move”.
“I rang him to congratulate him and said he would continue to have the support of Jet2holidays. We are already very close partners and we will continue to help them succeed – not just for John, but to help the entire independent travel agent community,” he says.
Heapy is also looking forward to working with other independent agency groups opening more shops, such as Barrhead Travel, Midcounties Co-operative Travel and more.
To support Hays’ former Thomas Cook branches, and all the other new independent agencies opening up, and to drive further growth, Heapy reveals he is looking to increase his trade sales team by 25%.
And he is keen to increase the proportion of trade business from its current level of about 27% as overall volumes grow.
“There’s no reason why that can’t rise to more than 30%,” he says.
“Other operators have stated their objective to increase their proportion of direct business.
“That’s not our strategy. We want our agent business to grow.”
It was one of the messages Heapy gave to the 350 delegates – including about 300 independent agents – who attended the operator’s Partners2Success conference in Spain this week.
The conference came at the end of the busiest six weeks of Heapy’s career, following Thomas Cook’s demise. He says: “The fundamental problem at Thomas Cook was the debt. It just shows no brand has a right to survive. Brands have to work hard every day to survive in an ever‑changing environment. There’s lots of examples where brands haven’t adapted and have failed.”
You can be sure Heapy isn’t going to let Jet2holidays be one of them.
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