Nothing Beats a Jet2 Holiday — It's More than a Meme
For the past several months, the catchy tune "darling take my hand... nothing beats a Jet2 holiday" has gone viral across the English-speaking internet. On Tiktok, Jet2's advert is mixed with videos of chaotic vacation experiences, unruly tourists, and other travel-related disasters. Interestingly, Jet2’s meme moment spotlights a company whose disciplined, vertically integrated engine delivers reliable, good‑value travel. Unlike many other garbage meme stocks, this memetic phenomenon reveals a real compounder.
Founded as a regional airline Jet2.com, Jet2 plc is now primarily a package tour operator, better known as Jet2holidays. Jet2's business model shifted from a purely airline business to selling bundled trips that include flights, hotels, and transfers, so holidays now drive ~80% of revenue.
Why Travelers (and Competitors) Love Jet2
Importantly, Jet2 is known for its focus on quality customer experience and delivering good value for price. Customer surveys in the UK consistently rank Jet2 and Jet2holidays #1 in their respective sectors. Even competitors credit the company for lean execution, plain‑spoken promises, and delivery as advertised, which builds trust.
“I actually went on a Jet2 holiday… Everything worked seamlessly. Everything was on time, everything was as described. It was a good experience.”
– Former Director of Customer Experience at LoveHolidays
How does Jet2 achieve this level of quality consistently over the last 20+ years? Jet2's operating principle seeks complete control over critical steps across the customer/user journey -- it owns and directly operates the aircraft, baggage handling, snacks on the airplane, routing, local reps, etc. In short, Jet2 controls the entire process to reduce points of failure even in times of distress and external shock.
In 2022 and 2025, Heathrow shutdown and ATC outage paralyzed nearly all UK flights. In the midst of this chaos, Jet2 continued to operate and deliver vacationers to their destinations. Jet2's consistency is their brand signature -- and their competitors know it too.
"Jet2 actually, to be honest with you, is a really impressive business. They are extremely lean. They give very honest opinions, reviews on their holidays. They don’t have anything fancy. It’s just basically a flight, a hotel, a transfer.”
– Former regional lead at TUI
Under the Surface Thinking
At this point, I can imagine some value investors coming out with their metaphorical pitchforks shouting, "Blasphemy! Warren Buffett says to never invest in airlines!" While I agree that passenger airlines typically make terrible businesses in the long-run, Jet2 fundamentally operates differently:
Jet2 is primarily a tour operator, only 20% of its revenue is from seat-only sales. Expecting Jet2 to behave like a regular airline would be an extreme take. Its most relevant comparators are online travel agencies (OTAs) in Europe like TUI, On the Beach, Expedia, Booking.com.
While Jet2's airline business remains just as capital intensive as any other airline, it operates with better line-of-sight into its future demand. If you know where your customers are going for vacation, you can quickly adjust your routes to meet this demand. This translates into a better capital allocation in the long-run.
Besides differences in business model, Jet2 also presents a flywheel that is rare and powerful: scaled economies shared -- this is a self-reinforcing loop in which more volume lowers unit costs, those savings are passed to customers, lower prices attract more demand, and the cycle compounds not just margin but also loyalty. This model isn't a novel concept, retail giants like Costco and Walmart built their business with scaled economies shared. Still, some successful budget airlines benefit from this flywheel as well. However, the concept itself isn't difficult to adopt -- it is much harder to execute and maintain this discipline across cycles.
Upon a closer look, we can see strong signs of this flywheel happening. Over the last decade:
Revenue increased 7x (from £1 to £7 Billion)
Jet2Holiday average unit price rose about 3.4% a year, a touch above UK inflation at ~2.6%.
Operating margins and ROIC stayed steady outside the COVID years.
ROIC averaged ~14% with minimal debt.
When examined together, these signs suggest that Jet2 transfers all the cost savings directly to keeping prices low. Importantly, this price is still high enough to generate an above-average ROIC.
Why can't other tour operators copy this formula? It comes down to discipline -- the moment the management team becomes complacent, the flywheel falls apart. Fortunately, Jet2's governance and incentives support this discipline, with the founder, Philip Meeson, retaining a meaningful stake of ~14% and the CEO holding equity that is 5.5x his cash compensation. However, I'd like to see the CEO increase his equity stake.
Investment Thesis
Disciplined Execution: The management has demonstrated a track record of focus and skills to execute and maintain the scaled economies shared flywheel. Excess capital is returned to shareholders, as appropriate. Evidence: consistently low price, high ROIC and no (net) debt.
Ownership Over Customer Experience: Jet2 owns all the critical steps along the customer journey means that it can and does deliver the most seamless, most consistent vacation experience for the price. Evidence: customers love Jet2, even the competitors.
Anti-fragile Model: Jet2 runs a decentralized base and operates its own supporting services (e.g., baggage handlers) -- this enables Jet2 to minimize disruptions from a single vendor or a major airport. This prevents the business from achieving maximum efficiency, but it pays off in the long run. Evidence: while its competitors floundered in 2022 and 2025 disruptions, Jet2 cancelled no flights and kept going.
Undervalued by Every Metric
Despite an impressive track record, the market prices Jet2 like a declining airline by implying negative long‑term free cash flow growth (about -3% p.a.). Valuation based on cash flow and earnings growth point to materially higher fair value:
DCF Based on Free Cash Flow Growth
Assumptions: FCF growth: 7%, terminal P/FCF at year 10: 5x
Discount rate: 12%
Implied fair value: ~£30/share
DCF Based on Earnings Growth
Assumptions: earnings growth: 15%, terminal PE at year 10: 7x
Discount rate: 12%
Implied fair value: ~£32/share
As of 8/1/2025, Jet2 trades at ~£16/share. This is a severely suppressed valuation when adjusted for its net cash position (~3x EV/FCF and 3x EV/EBIT)—despite having customer loyalty and stable returns on capital. The market is pricing it like a shrinking airline, not a resilient tour operator.
Despite the upside opportunities, I'd highlight a few items to watch:
Does the management remain focused & disciplined in executing its not-so-secret formula?
Is there any drift in corporate culture?
How do competitors in UK respond to Jet2's success?
Bottomline
Jet2 is a rare breed. It scales responsibly, earns customer trust, and generates attractive capital returns. It doesn’t rely on pricing power or luxury positioning. Instead, it wins through execution, value, and discipline.
It’s the top-rated airline in the UK, one of the most beloved brands in European travel, and now the subject of a viral meme. That cultural moment only adds to its brand strength.
Call it a meme. Call it a compounder.
Either way, Jet2 is a business worth holding on to.
Source: Jet2 Investor Relations, AlphaSense Expert Interviews, UK customer satisfaction index, Which?
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