By Sarah Young
LONDON (Reuters) -British airline easyJet (LON:EZJ)'s fast-growing holidays business is on track to become one of the biggest players in Europe and is targeting French and German markets for the next stage of expansion, its CEO said.
While low-cost giant Ryanair (LON:0RYA) sticks to no frills flying, its tangerine-liveried competitor easyJet is building a travel company to try to grow by selling holidaymakers a bigger slice of their trip.
Former TUI (LON:TUIT) executive Garry Wilson was hired in 2018 by easyJet CEO Johan Lundgren, his former boss at TUI, to head a digitally focused holiday business that launched the following year, replacing the airline's smaller and mainly outsourced holiday unit.
As travel demand has bounced back after the pandemic, easyJet holidays is set to boost group profits by more than 100 million pounds ($129 million) this financial year, which Wilson said was just the beginning.
"There's a huge amount of growth we can still have," he said in an interview, noting the airline has 93 million seats per year and customers with holidays as well as flights only account for 4% of those.
EasyJet holidays serves only UK customers, competing with Jet2, TUI and others to sell Mediterranean beach and city break packages, but it will launch over the coming weeks in Switzerland, a market which Wilson called "a gateway".
"France and Germany will then follow probably quite quickly," he said.
The holiday division's strength, Wilson said, is that as well as bringing in new customers, it sells more to existing ones. Those who usually book a flight and arrange their own hotel are finding they can get a better deal by buying the lot from easyJet.
The technology behind the website is key, he added.
"We're just over 200 people in the entire holidays business. Some of the traditional tour operators will have three times that just in the IT team," he said. "We've got much lower overheads that we can then pass onto the customer."
Given Britain's cost-of-living crisis, savvy holidaymakers are keen to search out the best value deals. Wilson said all-inclusive deals have become more popular as they give certainty of cost at a time of rising prices.
Of easyJet holidays' customers, about 70% book all-inclusive deals, up about 5%-10% on last year, said Wilson, with the rest booking half-board or self-catering.
The surprise, he said, was that customers had not shortened their trips or traded down from more expensive destinations like Greece to cheaper ones like Tunisia.
He attributed that to the pandemic, as people are making travel a priority after around two years of restrictions, but next year could be different, given the squeeze on household incomes.
Package holidays cost 12% more this year than last, according to TravelSupermarket figures.
For those booking for 2024, Wilson predicted inflation should ease.
($1 = 0.7751 pounds)