EasyJet holidays is projected to make an annual profit of more than £80 million this year as it expands sales from the UK into other parts of Europe.
Package holidays by the budget airline’s in-house tour operator will start being sold in Switzerland this summer followed by other European countries.
Meanwhile, the airline is to open a new base at Birmingham airport with three 186-seat Airbus A320s from next spring, creating 100 jobs for pilots and cabin crew.
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The carrier’s ninth UK base comes as easyJet operates its largest UK summer flying schedule with 8% more capacity than before the pandemic.
EasyJet already operates from Birmingham to destinations such as Amsterdam, Geneva, Milan, Naples, Lisbon, Faro and Palma but creating a base at the airport will see unspecified new routes introduced next year.
Strong summer demand
The disclosure came as easyJet reported strong demand for the summer after trimming seasonal half year winter pre-tax losses to £411 million from £545 million as capacity rose to almost 38 million seats.
The holiday arm’s growth is to be bolstered by “targeted investments” to strengthen its customer base.
The airline said: “This has been demonstrated at Gatwick where marketing spend has been focused, targeting easyJet’s largest base of aircraft.
“Future initiatives are underway to optimise pricing alongside enhancing the product offering through room options and ancillary products.
“Our multi-currency technology platform enables easy and rapid expansion into other source markets, where we will unlock the Swiss market next.
“Switzerland will go on sale this summer for departures from early 2024. We already have a leading leisure network from Geneva and Basel to destinations including the Balearics, Canaries and Greece, where Switzerland’s package holiday market of 1.1 million customers provides an opportunity for easyJet holidays to continue its rapid growth.”
Travel ‘number one’ priority
EasyJet chief executive Johan Lundgren said: “Recent research has shown that travel is the number one priority for household discretionary spend with customers safeguarding their holidays and increasingly opting for low cost airlines and brands which provide great value.
“EasyJet holidays expects to deliver full year profits of more than £80 million as it continues its rapid growth in the UK alongside its entry into the European package holiday market.
“From summer it will start selling holidays in Switzerland which will be the first of a number of planned new European markets.
“All of this progress should result in the acceleration in the delivery of our medium-term targets while we continue to also capture the opportunities ahead.
“This includes the addition of a new base in the UK, in Birmingham, which will not only provide more choice and connectivity for consumers but also the creation of hundreds of jobs.”
He added: “Having already served Birmingham for many years, the decision to open a base and grow at the airport now is testament to the strong demand we see, coupled with the importance of the UK market in supporting our profitable growth.
“The UK is easyJet’s largest market with 55% of all easyJet passengers flying to and from UK airports so this move will not only reinforce our leadership position as the UK’s largest airline, but also demonstrates our confidence in the resilient strength of demand for travel, with customers choosing us for our trusted brand, unrivalled network and great value fares.”
Emma Carr, retail and commercial litigation partner at sector law firm Gowling WLG, said: “EasyJet is currently navigating through economic turbulence, and despite introducing new cost control measures and adding additional routes to its offering, more is needed to strengthen its margins.
“CEO Johan Lundgren needs to focus on decarbonising the airline’s fleet ahead of the net zero 2050 target, something which the sector as a whole is falling behind on compared to others, as well as continuing to provide affordable pricing to its customers in order to stave off competitors as the peak summer period approaches.
“Shareholders will be hoping this is when the business can regain momentum and start flying high again.”
More: EasyJet holidays rated as one of best places to work
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EasyJet reports strong summer bookings with capacity back to pre-Covid levels