Jet2 chief warns Reeves not to treat aviation as a ‘cash cow’ ahead of Budget

Jet2 chief executive Steve Heapy has urged Chancellor Rachel Reeves to stop using airlines and the holiday industry as a “cash cow”, warning that any further increase in aviation taxes would hit low-income earners hard and risk turning families away from traveling abroad.

Heaby – which runs Britain’s largest holiday provider and the UK’s third-largest airline by passenger numbers – said higher taxes would “inevitably” be passed on to passengers, pushing up prices and reducing demand.

“As we all know, we cannot escape the basic laws of economics,” he said. “Increasing prices may reduce demand, which is not a good thing because the people who will not be able to afford a holiday will be the lowest-income members of society. It would be counterproductive if flying became something for the rich and privileged.”

The warning comes as speculation grows that Reeves may turn to the aviation sector for additional revenue in next week’s Budget. The air passenger charge (APD) – which is paid by almost every air passenger departing from a UK airport – last rose in April, and is set to rise again next spring. Current APD prices range from £14 for domestic flights to £224 for long-haul flights over 5,500 miles.

Hebe’s comments were accompanied by Jet2’s first-half results, which revealed record revenues of £5.3bn, up 5 per cent year-on-year. Seat capacity rose by 8 per cent to 16 million, partly driven by new operating bases at Bournemouth and London Luton. Profit before tax (adjusted for foreign exchange movements) rose 1 per cent to £780 million.

The airline reported a 16 per cent increase in flight-only passengers to 4.7 million in the six months to September, reflecting an industry trend of travelers booking later than usual. Net ticket revenue fell by 7 per cent as Jet2 used promotional fares to stimulate demand. Holiday passengers rose 1 percent to 4.7 million.

Jet2 confirmed that it expects full-year operating profits to be in line with consensus expectations of £453m. The company’s fiscal year is largely based on the summer period, with the second half typically generating lower profits.

The results provided reassurance after a profit warning in September, when Jet2 told shareholders it expected full-year adjusted earnings to come in at the lower end of market expectations due to limited outlook and more cautious consumer spending. In response, the airline cut 200,000 seats from its winter schedule, reducing total winter capacity to 5.6 million.

Despite the pressures, Heapy said demand remains resilient: “Clearly customers still want to spend their well-earned holidays in the sun, even if they book close to their departure date.”

The update comes a week after Jet2 announced that it will begin services from London’s Gatwick Airport in March 2026, after securing places for six aircraft. The move gives the airline a foothold at the UK’s second-largest airport, but analysts say it will face stiff competition – especially from easyJet, which has more than 70 aircraft there.

Jet2 expects the new Gatwick operation to become profitable by 2029.