The in-house tour operator, which has just revealed a pre-tax profit of £122 million for the year to 30 September, currently takes up just 4% of easyJet airline seats.
Talking to analysts, easyJet group chief finance officer Kenton Jarvis said: “Four per cent of the airline drives 5% market share (of the tour operation). We need 10% to make £250 million.”
Jarvis added easyJet holidays’ profit margin before tax had jumped from 11.7% to 14.8% this year.
In the 2024 financial year, easyJet holidays expects to grow by more than 35%, taking its UK market share from 5% to 7%. The operator will also launch in France and Germany.
EasyJet chief executive Johan Lundgren said the tour operation was “probably the biggest change compared with 2019. “It has really delivered for us and we have more going on in this area”.
“It has been an absolutely phenomenal success. We see it as going way over £250 million medium-term. It is almost impossible to replicate because it builds on our network and has the attraction of the airline brand. In 75% of times, we are cheaper than competitors – it is a digital model with a less than 4% fixed cost base. You will not find that with any competitor.”
Lundgren said rival operators had to commit to seats, unlike easyJet holidays. He said rivals’ summer 2024 capacity increase was not a concern for easyJet. “When you look where that is coming from, it’s tour operators buying seats from easyJet. We are very pleased about that.”
EasyJet holidays was 30% sold for summer 2024 at “really good” prices, Lundgren said.
The operator’s chief executive Garry Wilson added rivals had issues with fixed capacity. “I think Jet2 are up to nominally 80% of their seats attached to holidays, so they need to get that right because there is nowhere else to put those seats.
"We have 4% of seats, we will not be forcing customers into specific destinations or hotels which the traditional operators have to do.” He added: “If we see demand, we will have hotels in dynamic inventory.
