An airline and package holiday chief has denied that ‘staycationers’ – people taking their holidays in Britain due to austerity – pose a threat to the overseas breaks business.

Steve Lee, commercial director of Yeadon-based leisure airline and Jet2holidays package company, expects continued growth in the number of holidaying abroad this summer - including those looking to escape from the Olympics or who prefer to watch the events from the comfort of a bar or villa in warmer climes.

Mr Lee said the trend towards more ‘staycation’ breaks was a myth and going abroad could be cheaper than visiting the Yorkshire Dales.

He said: “I’ll be in the Yorkshire Dales at half-term and I could have had three nights in Majorca for less than it will cost me to stay here. I think the idea of staycationers is a myth and we are optimistic about our prospects.”

Mr Lee was speaking as Jet2holidays marked its fifth anniversary, with the airline business set to celebrate a decade of operations in October.

Since its launch Jet2holidays has seen passenger numbers rise by 500 per cent from 34,000 in its first year to more than 200,000 in 2011, with the 500,000th booking expected in May.

The package holiday business started with three destinations, Spain, Portugal and the Canary Islands and now offers short breaks and holidays in 40 European destinations and employs more than 85 staff. In addition to sunshine resorts, it has extended its to the city breaks market, including favourites such as Paris and Rome with Berlin, Budapest and Istanbul being added this summer.

Award-winning Jet2holidays reported a 146 per cent revenue increase from 2010 to 2011, when it Indulgent Escapes, its first five star luxury offering, as well as growing its family packages.

Mr Lee said that 65 per cent of holidaymakers now opted for all-inclusive packages and the trend was growing.

He said: “We are bucking the industry trend in the current climate, with sustained growth and record January bookings, in contrast to the market which is reportedly seven per cent down on last year. Add to this our growth plans for this year, we are confident that 2012 will be a record year for Jet2holidays. We look forward to a bright future serving the people of the North with great value package holidays.”

Meanwhile, struggling tour operator Thomas Cook, which employs 1,000 staff in Bradford and Birkenshaw, has revealed pre-tax losses of £151.7 million in the three months to December 31, compared with £99.3 million the previous year. But the UK’s second biggest travel company said bookings for summer holidays were one per cent lower than a year ago, ahead of rival owner of Thomson Holidays, TUI Travel, which reported a seven per cent dip.

Chief executive Sam Weihagen said: “We are fighting back.”