Was snobbery in the City the reason Jet2’s shares crashed?

It’s a no-frills, cheerful holiday company that TikTok loves and is based in the North. So why did the Square Mile not understand how healthy its business was, asks Chris Blackhurst – could it be old-fashioned elitism?

On a recent holiday in Turkey, at Dalaman airport, Jet2 was much in evidence. Its aircraft were on the tarmac, next to those of the major carriers, its check-in desks were lined up alongside those of the big players. Judging by the lines of returning holidaymakers, Britain’s biggest travel operator was doing healthy business.

Try telling that to the City. While we were on the concourse, traders in London were marking down Jet2 shares. They fell 24 per cent at one stage, wiping £600m off the company’s worth. This was because the company warned profits would come in at the lower end of analysts’ forecasts.

They were predicting a profit consensus range of £449m to £496m. The Leeds-based firm was saying the bottom figure was more realistic. Do the math: let’s call it £500m tops, dropping to £450m, so a 10 per cent fall. Since when has 10 per cent been 24 per cent?

Likewise, Jet2 said customers were cutting back on holidays and as a result, it would be trimming its winter seating capacity from 5.8 million seats to 5.6 million. That’s not 24 per cent either, not anywhere close. Barely a dent, too, on an overall total last year of 19.8 million passengers, of which 6.6 million were on its package holidays.

The shares did recover, but they had still dropped excessively, versus what the company was indicating. It shows how the market overreacts, how investors are taken over by the herd instinct. The madness of crowds, in other words.

What lies behind the stampede for the exit is a lingering snootiness where Jet2 is concerned. The City does not quite get it, not in the same way as it does a blue-chip, pukka stock.

Jet2 slips into that category of business that the ultra-smart banks (which is how they see themselves) feign to admire, but about which, in private, they probably ask... really? It raises eyebrows. The company offers upmarket luxury holidays but is best known for value (code for discount) deals. It’s no frills, cheerful, as sung by Jess Glynne in its catchy, viral “Hold My Hand” ad campaign. TikTok loves it and the sign-off voiceover, “Nothing beats a Jet2 holiday!”

Going places: Jet2’s chief executive, Steve Heapy, and his team at the launch of the first flight from Bristol airport in 2021 (Jet2)

In the Square Mile, they’re not entirely sure about the cut of its jib. It’s northern, along with another company that attracts similar City sniffs, THG. The CEO is Steve Heapy. He’s been with Jet2 since 2009. He’s a no-airs-and-graces northerner, like his company. In a questionnaire, he preferred rugby league to rugby union and Blackpool to Brighton, said he would rather fly economy than business, and eschewed a cocktail or lager for a Guinness.

He may not have gone to university, but he is deft, super-bright; quite capable of erudite discussion with anyone on all manner of subjects. Heapy’s Jet2 is currently running a promotion in conjunction with Penguin Books to win £200 worth of holiday reading.

The company announced a rise in profits in July (PA)

His focus is on making sure his customers have the best experience. Jet2’s mission is the democratisation of travel, doing for flights and holidays what Tesco did for supermarkets in the 1960s and Next for fashion in the late 1980s and 1990s. Tesco’s old mantra of “pile it high, sell it cheap” and the more recent “every little helps”, along with Next’s “basic, honest merchandise without pretension to status or glamour”, could all apply to Jet2.

Heapy told the Labour Party conference in 2024, at a fringe event he co-hosted with the mayor of West Yorkshire, Tracy Brabin, that he would provide “affordable holidays for hard-working people”. This July, Jet2 reported record profits and passenger numbers. Heapy said the urge to “escape” from Britain had boosted business: “I spend 50 weeks a year in this country and I want to escape it. People desperately want to get away … from their day-to-day lives.”

Money may be tight, but that sentiment has not diminished. As Glynne sings on the advert: “Just put your arms around me, tell me everything’s OK.” If only the snobbish City were so inclined.