Summer 25 marks the 5th year of Easyjet Holidays operating as a separate holidays division with a dedicated internal management team running the business, and the company is expanding rapidly, readying itself to challenge Jet2 Holidays for the top spot as the UK’s largest Tour Operator. However, its history begins well before this milestone date.

Initially, Easyjet Holidays was created as a quick response to the success of Jet2 Holidays, which I helped Philip Meeson, and his team launch in 2007 after presenting the opportunity of launching a Dynamic Packaging tour operation on the back of their low-cost airline to fill the gap in the market left by the effective closure of MyTravel in the North following its merger with Peterborough-based Thomas Cook in the same year.

Having served as MyTravel’s Deputy Chief Executive, I gained direct insight into the threat posed by low-cost carriers and the internet to the dominance of large, vertically integrated groups in the package holiday sector. When MyTravel encountered difficulties in 2003, I left and founded the “On Holiday Group” together with MyTravel’s Purchasing Director Bill Allen and Cosmos Sales Director Brian Young, to exploit the rapidly developing dynamic packaging market, and quickly tied up with Jet2.

However, our time as technology and bed bank partners was always limited once Meeson recognised the strategic advantages of having an in-house tour operation, and after two years, he brought in Steve Heapy and many other former Mytravel staff to run his own operation.

Ironically, this in turn led to an opportunity to provide a tour operating platform to Easyjet Holidays in partnership with Hotel Beds, who operated Easyjet Holidays between 2014 and 2017. In truth, the experience was a frustrating one, as Easyjet always saw the tour operation as a “non-core” business and just a way of boosting ancillary income. They even refused repeated pitches to allow us to sell via the trade, as they saw it as a distraction they did not need.

This all changed when Johan Lundrum moved from managing the vertically integrated tour operator TUI to becoming Easyjet Airways’ CEO. He clearly recognised the advantages of a full-scale Easyjet Holidays and recruited Garry Wilson, along with several other former TUI staff, to oversee the new operation that launched in April 2019 for Summer 2020.

However, the timing could not have been worse, with Covid-19 taking hold in March 2020, effectively destroying the Summer 2020 and 2021 seasons before a slow relaunch in 2022. Nevertheless, Easyjet Holidays’ flexible model and lack of hotel guarantees allowed it to minimise losses compared to the UK’s market leader TUI, which accumulated substantial losses and debts during this period.

COVID-19 also taught holiday makers that DIY holidays came at a substantial risk, and a massive 31% expressed a wish to switch to ATOL bonded holidays, which the new operation was perfectly positioned to provide to its Easyjet Flights audience.

The 2022 year proved the concept for the new operations with its 1.1m carryings delivering a healthy £39m profit for the group. Passengers and profits have since been on a massively positive upward spiral, culminating in 2024’s 2.4 million passengers and £190 million group contribution.

I believe that Easyjet Holidays is just beginning its UK expansion and will continue to grow at a healthy rate of 25% per year, as it currently accounts for only 5.4% of its parent airline’s seats. In contrast, Jet2 Holidays is already reaching capacity limits, using on average 66% of its parent airline’s seats, with some core beach routes exceeding 80%. Easyjet Holidays can expand quickly by selling more to its airline customer base, whilst Jet2 Holidays depends on its parent airline opening new bases and routes, which requires creating new demand. Meanwhile, Easyjet is simply shifting customers from flights alone to package holidays.

Easyjet also has a £50 profit advantage per passenger over its OTA competitors, as it can capture a large share of free brand traffic from its parent flight-only business. This can be used to reduce prices or to outbid these companies for advertising clicks, both of which suggest that Easyjet Holidays will grow more quickly.

So no matter how you see it, the future is “Orange,” and I expect that over the next 5 years Easyjet will become a market leader with 8 million passengers. So the interesting question is,” Who will bear the cost of this growth?

I expect 65% of the extra 5.6m to come from simply converting Easyjet flight customers from DIY holidays to packages, but this leaves 35% or 2m to come from increasing market share at the expense of competitors.

Ironically, Jet2 Holidays’ current significant strength in trade distribution could become a weakness, as it has been secured at a low commission rate of 6% if agents want price parity. You might easily see some of this being lost if Easyjet offered volume-related commission overrides above this.

The rejuvenated Tui holidays, now that it has paid off most of its debt mountain and also agreed on a strategic distribution deal with Ryanair, look quite secure, as it has no competitors for its Dreamliner long-haul beach product.

So, this leaves the likely losers to be the OTAs Love Holidays and On the Beach, particularly as we see a migration from their Google PPC heartland to AI Search, where it is likely asset holders will be given preference.

This makes Love’s February 2026 IPO crucial for the business as it seeks to defend itself from the ever-expanding “Orange” machine.

The next 5 years are likely to be highly interesting.