Jet2 has said that prices are set to slow following the post-pandemic increase in holiday costs, as competition across the sector starts to rise.

The tour operator and airline suggested that bookings for the summer have seen a "modest increase" in price compared to 2023, despite prices becoming "more competitive" across April and May.

Jet2 added that on-sale seat capacity for summer 2024 is currently 12.3% higher than last year 17.1 million seats, with 55% of the summer season schedule already sold.

Forward bookings for package holiday customers are also up 13% year-on-year, and there is "healthy demand" for flight-only passengers, which is up by over 18% in the same period.

Chief executive officer at Jet2, Steve Heapy, said: "We are pleased with the strong financial results for FY24 which underlines the resilience, flexibility and popularity of our product offering, plus the outstanding customer service provided by our colleagues.

"Although still very early in FY25, we remain confident that as a much-trusted holiday provider with an end-to-end customer care approach underpinned by our principles of 'people, service, profits', our customers will continue to travel with us from our rainy island to the sun spots of the Mediterranean, the Canary Islands and to European leisure cities."

Following these interim results, the holiday operator has re-estimated its expected profit before foreign exchange revaluation and taxation, from £510m - £525m to £515m - £520m, which is a 33% increase year-on-year.

Furthermore, Jet2 said that its balance sheet position remains "very strong" with total cash at £3.2bn as of 31 March 2024, and an own cash balance, which excludes customer advance deposits, of £1.3bn.

However, the group said it is "mindful" of the current macroeconomic and geopolitical environments and the potential impact they may have on future consumer spending. Therefore, Jet2 suggesed that it is "too early" to provide guidance for group profitability for FY25.

Investment director at AJ Bell, Russ Mould, added: "While Jet2 looks well positioned ahead of its key summer trading period the travel operator spooked investors as it warned of more competitive pricing.

"This could be a sign that the pricing power enjoyed by the sector, with people prepared to pay whatever it takes to get their week in the sun, is starting to ease.

"The company’s customer-focused approach should continue to stand it in good stead and help it defend market share from rivals."

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