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EasyJet Relaunches Vacation Business Package


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EasyJet is re-launching its package holiday business as the airline seeks to fill the industry gap left by Thomas Cook's disappearance earlier this year.

About 20 million people fly EasyJet to Europe annually, but only 500,000 book accommodation through EasyJet.

The news came as the carrier saw a 26 percent drop in pre-tax profits to £ 427 million in the year through Sept. 30.

EasyJet also said it would become the world's first large zero carbon net airline, offsetting carbon emissions.

Chief Executive Johan Lundgren told the BBC Today program: "This is not a long term solution, compensation is not perfect.

"I don't think it's green washing, everyone recognizes that it works, but that adds to the fact that since 2000 we have reduced our carbon emissions by 30%."

He said the company will assume the cost of £ 25 million and added: "This is not something we are adding to ticket prices, which makes us one of the largest carbon offset companies in the world."

Explaining the decision to relaunch its package holidays, EasyJet said: "The total package holidays market in Europe is worth around £ 61 billion a year. The UK is a £ 13 billion market and grows 6% a year.

"The way customers are taking a vacation is changing, and we know that customers want a holiday with multiple durations rather than the traditional seven and 14 nights.

"You get a better price reservation directly"

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Philip Petty

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Philip Petty and his wife Lyn now prefer not to go on an organized vacation

Not everyone thinks Easyjet's bet on the package holiday market is a good idea. Philip Petty says he has booked holidays and flights separately "for years".

"Not only can I choose what time I want to fly, I like to choose where I stay," he says. "You can get a better price when you book directly with a hotel."

Petty was on an organized vacation in Greece and slipped on a wet hotel floor, breaking her leg.

He felt that he and his wife had little support from the representatives, which led him to start looking for independent vacations.

"EasyJet is excited about the opportunity to create a large party market player with low initial investment and limited risk."

The airline said it conducted a survey that showed its customers wanted flexibility in tailor-made flights and vacations, and designed its business to respond to that.

& # 39; Cautiously Optimistic & # 39;

EasyJet's results showed that annual revenue increased 8.3% to £ 6.4 billion as capacity increased, but total revenue per seat fell 1.8% to £ 60.81 due to "some weakness in consumer confidence ".

Passenger numbers for the year increased by 8.6% to 96.1 million.

Julie Palmer, regional partner at Begbies Traynor, a business consultancy, said EasyJet was "enjoying the current climate that sweeps across the industry."

She added: "EasyJet has been searching for the bones of other airlines that have suffered from falling demand, including Air Berlin assets at Tegel airport and Thomas Cook runway slots at Gatwick and Bristol airports.

"With Brexit continuing to drag on, EasyJet will hold on to more turmoil, but will be cautiously optimistic for the future and expect an upward trajectory."

However, last week rival airline Wizz Air chief Jozesf Varadi said he was "surprised" to learn of EasyJet's vacation package plans.

He told the Telegraph, "I don't think this packaged vacation industry flourishes, I think the model is outdated. Why should customers pay a premium for next to nothing?"

EasyJet's move to package holidays is hardly a Pauline conversion. It already sells about half a million packages a year, and the disappearance of Thomas Cook has left a market gap that could not have been missed by airline CEO Johann Lundgren, a former Tui employee, Thomas Cook's main rival.

The company plans to roughly double its holiday package sales, which will still make it a small player, as well as Tui (who has a Civil Aviation Authority license to carry 5.6 million people a year) and put it on shortly. above British Airways. holiday operation, licensed to just under one million people.

Lundgren could undoubtedly do more – EasyJet is probably the UK's largest customer carrier for traditional Mediterranean sun destinations – but he will be aware that investors tend to be nervous about the low cost airlines that fly. move away from the core business. .

Perhaps most attractive is the airline's commitment to offset all its carbon emissions. Environmentalists will be skeptical, and the real value of compensation schemes, which see polluters paying for tree planting or low carbon power generation schemes, is questionable.

But Lundgren and EasyJet's board realize that their passengers are becoming extremely sensitive to the environmental impact of flights and making them more comfortable with an EasyJet flight makes commercial sense. Either way, it's just an intermediate step, says Lundgren, until genuinely carbon-free methods of aircraft propulsion are found.

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