The CAA last week confirmed the airline had registered an Atol protecting 184,994 seats – 18,544 more than its easyJet Holidays subsidiary, which currently operates under the Atol held by Hotelopia Holidays.
Launched in 2011, easyJet Holidays, the airline’s tour operator division, initially sold flights and accommodation in partnership with the Lowcosttravelgroup.
This partnership lapsed in May 2014, after which easyJet Holidays switched supplier to Hotelopia and vowed to become one of the UK’s pre-eminent tour operators.
Since then, easyJet has long been expected to broaden its ambitions as a tour operator, but admitted in May it “hadn’t taken advantage of opportunities in this area” while pledging to continue investing in eastJet Holidays to “capture a significant share of the market”.
EasyJet has already poached Tui’s group product and purchasing managing director Garry Wilson to head up easyJet Holidays.
The airline, though, has stressed its Atol is unrelated to its tour operation ambitions. An easyJet spokesperson said the licence would financially protect third-party product, such as car hire, sold via the easyJet website in addition to flights, as required by the new Package Travel Regulations (PTR).
“EasyJet is in favour of protection for customers. Those booking package holidays with easyJet Holidays are already fully protected through the Atol scheme – we’re fully compliant with the new regulations,” the airline said in a statement.
EasyJet’s Atol arrangement with Majorca-based Hotelopia is due to expire next March, and the CAA has said it will no longer accept renewals from overseas businesses.
Hotelopia’s licence is scheduled to shrink to just 3,954 protected holidays by the three months to March 2019. It is unclear at this stage how easyJet will handle this arrangement.
Despite easyJet’s insistence its Atol is unrelated to its tour operation, Alan Bowen, legal advisor to the Association of Atol Companies, told TTG he believed the move appeared to signal “huge plans” for its holiday division.
“The new licence is for 184,994 seats for the three months to the end of September,” said Bowen. “This would suggest an annual licence could be for as many as 750,000.”
Bowen added having an Atol would enable easyJet to sell the majority of its third party product as packages rather than linked travel arrangements, which offer less financial protection and fall outside the scope of Atol.
Travlaw partner Matt Gatenby added: “It’s a really interesting case. Monarch had Cosmos, British Airways has British Airways Holidays - but there is no reason airlines can’t become package travel organisers, so long as they have financial protection.
“There are various ways of having financial protection like insurance and bonding, it might just be they’ve decided getting an Atol is the easiest way to do this or is best for consumer confidence - people trust that Atol stamp.”