The benefit to Jet2 ultimately is with the airports close together, they tend to compete with one another. For example, if a 14nt holiday from GLA is £2100, yet the same holiday, just with flights from EDI instead is £1900, passengers will tend to travel the difference to save money. Now, as EDI is competing on the route, at a lower price, GLA will lower its price also, in order to compete. The advantage to Jet2 is that; 1: They have greater capacity on their holidays, and 2: The consumer saves money. And if the consumer saves money, they are more likely to travel again in the near future with Jet2, and of course the more passengers, the more profit in the long run.
I think your point contradicts itself, if customers will travel to save money, then why would they not choose another airline/holiday company who were even cheaper? If you are chasing the price sensitive market there is absolutely no brand loyalty. I don't see the logic in Jet2 competing with
itself to offer the cheapest package. In your example they left £200 quid on the table, multiply that by 150-200 passengers per flight and you might begin to see the issue... Low Cost Carriers are not, necessarily, Low Cost to the customer, their operating costs are low, the airline can choose to pass this on as low fares, or not to.