easyJet
easyJet: Three months. £85 million of profit. £84 million of it came from the part of the business that doesn't fly a single plane.
ALL BREAKDOWNSTHE BREAKDOWN
11/3/20265 min read
easyJet: Three months. £85 million of profit.
£84 million of it came from the part of the business that doesn't fly a single plane.
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THE SETUP
A family in Birmingham books easyJet flights to Málaga for August. Then they open another tab and book the hotel somewhere else.
In 2019 nearly every easyJet holidaymaker did the same. Around 20 million people flew easyJet to Europe’s big holiday destinations that year. Only half a million of them booked their hotel with easyJet.
That’s one in 40.
easyJet had done the hard work. It found those families and flew them to the sun. Then a booking site took the money for the room without having to find anyone.
We’ve seen this happen in boardrooms more than once. A business spends heavily to win a customer, then lets somebody else make the easy money from them. Nobody worries, because the first sale still hits its numbers.
easyJet spotted the problem in 2018. It hired people who had run package holidays and spent the next seven years fixing it.
In 2026 the fix was tested. Conflict in the Middle East pushed fuel prices up and the airline’s profit almost disappeared. One division of easyJet hardly felt any impact.
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THE PLAYBOOK
1. Charge for what used to be free
In February 2021 easyJet changed the rules on cabin bags. The big wheelie case for the overhead locker was no longer in the basic fare. You still got a small bag under the seat for free. The overhead locker cost extra.
easyJet said it would speed up boarding. I believe that. It also turned a cramped shelf above your head into income.
In the year to September 2025 extras such as bags and seats brought in £2.6 billion. That is 30p of every pound the airline took.
The catch is that everyone does it. Ryanair runs the same play. The problem is that Ryanair does the same and so does almost every other budget airline in Europe. Nobody picks easyJet because of its bag fees.
That’s a lot of money from bags and seats. But on a week in Spain the hotel can cost more than the flights, and easyJet still wasn’t selling it.
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Takeaway: Once every rival charges for the same extras, they stop being an advantage. They become the price of staying in the market.
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2. The next purchase
In December 2017 easyJet hired a chief executive from the other side of the holiday trade. Johan Lundgren had spent years at TUI, the German package holiday group. He knew exactly what a hotel booking was worth.
In 2018 easyJet went after Garry Wilson, another long time TUI man, to build a proper holiday company with its own platform.
easyJet knew how to fly people to Spain. It didn’t know how to put them up when they got there. So, it hired people who did.
easyJet holidays launched in November 2019. Its first customers set off in January 2020, just as Covid reached Europe. It then stalled for about two and a half years, waiting for a normal summer to return.
If you were ranking bad moments to launch a travel company, that one would be near the top.
It made £38 million in its first normal year. By the year to September 2025 it made £250 million. That was 38% of the group's £665 million profit, from a business that created six years earlier. Kenton Jarvis, who has since replaced Lundgren, wants £450 million by 2030.
Jet2 got there first. Nearly two in three of its passengers now book a package. easyJet isn’t just chasing the booking sites. It’s chasing Jet2.
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Takeaway: Find out what your customers buy straight after they buy from you. Then work out if you can sell it to them better than whoever does now.
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3. Build a second margin before the squeeze
Airlines have costs that don't shrink when customers do. Planes and crews still need paying in February. Summer has to pay for winter.
In the year to September 2025 the airline kept 4.8p of profit from every pound it took. Holidays kept about 17p.
In 2026, the six months to March, easyJet flew 6% more people and filled 90% of its seats. It lost £552 million before tax.
Fuller planes, bigger loss. Holidays made £61 million.
The three months to June were meant to be the turn. They weren't. The fuel bill went up £105 million and bookings softened after the conflict began. Group profit fell from £286 million to £85 million.
Holidays made £84 million of that £85 million. The airline made about £1 million in three months.
The fuel costs land on the airline. Holidays still depends on the planes flying, but it makes so much more on every booking that a bad quarter barely dents it.
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Takeaway: When you only keep 5p in every pound, one rising cost can wipe out your profit. Find something more profitable to sell the same customers before that happens.
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ONE MORE THING
One number in easyJet’s accounts gets almost no attention: £477 million.
That’s the value of easyJet seats sold inside package holidays last year.
Its important because, a budget airline lives or dies on price. Put its fare next to Ryanair’s on a comparison site and it has to be the cheapest, or close to it. Package seats skip that fight.
Buy a package and you see one price for the flight, the hotel, the pool and the all-you-can-eat breakfast. You never see the flight on its own, so you can’t put it next to Ryanair’s.
That’s nearly half a billion pounds of easyJet seats sold without a price war.
easyJet doesn’t say whether it makes more on those seats. Some of those families would have flown easyJet anyway. The difference is that easyJet doesn’t have to be the cheapest to sell them.
In August easyJet agreed to sell itself to Apollo, the US private equity firm, for £5.7 billion. That’s 81% more than the shares were worth before the bidding started. Shareholders vote on 11 November.
Most of Apollo’s reasons for buying are about the airline, from the brand to the extras it sells. But it also picked out the holidays business by name as something it wants to grow. A buyer spending £5.7 billion doesn’t mention part of a business by accident.
That doesn’t mean holidays can carry a bad airline. Ryanair made €2.26 billion last year without a holiday business at the heart of its plan. easyJet still has to win on the flight.
Apollo is buying an airline. It is also buying the one part of easyJet that kept making money when the planes didn’t.
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THE PAPER TRAIL
The Independent: easyJet’s first £29 flight, 2020
5 minute read
A telephone number painted on a plane, £29 tickets and a founder working from a Luton shack.
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The Mirror: Jane Boulton reveals Airline’s filming secrets, 2025
5 minute read
The no-nonsense airport manager remembers passengers bringing live lobsters, pretending to phone operations and becoming a TikTok celebrity.
https://www.mirror.co.uk/3am/celebrity-news/i-easyjets-most-hated-airport-35154459
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BBC News: Ryanair’s £50,100 Pinocchio apology, 2010
1 minute read
Ryanair depicted Stelios as Pinocchio in newspaper adverts; the stunt ended with a libel settlement, damages and public apologies.
https://www.bbc.com/news/business-10645543
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Garry Wilson: Launching a holiday company just before Covid
5 minute read
Wilson’s first-person account of launching in November 2019, welcoming customers in January, then almost immediately having to work out how to bring them home.
https://www.business-school.ed.ac.uk/alumni/aluminate/features/easyjet-holidays-the-journey-so-far
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Time Out: The holiday supposedly cheaper than staying home, 2022
2 minute read
A £650 month in an Egyptian resort became easyJet’s answer to rising household bills.
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