In a move that could potentially have massive repercussions for the European package holiday (or ‘Inclusive Tour’) industry, Ryanair’s CEO Michael O’Leary has mooted that the low-cost carrier is eyeing an entry into the marketplace.
Spurred on by the successes and revenues made by both easyJet and Jet2 in the market, Ryanair is keen to exploit its dominance in the European low-cost arena and expand into offering flight and accommodation deals to the 100 million+ customers it flies annually.
Speaking to the Telegraph newspaper in the UK, O’Leary stated that Ryanair opening up and package holiday brand was a “possibility”.
“I wouldn’t rule out setting up a holidays division. The holiday product is probably a reasonable way of charging higher fares and yields and for wrapping it into a package,” O’Leary said.
He added that he intended to review the situation once Ryanair had “squeezed as much growth out as possible from the increased size of its fleet.”
Any such move would not come as a surprise to many already in the industry. Having been at legal loggerheads with several online travel agents (OTAs) in the past, over the past few months the Ryanair Group of airlines (Ryanair, Ryanair UK, Buzz, Malta Air, Lauda Europe) has been fostering closer ties with some of these allowing the OTAs to sell package holidays involving Ryanair flights.
However, O’Leary would like to see these customers brought in-house to save paying commissions to the OTAs and reduce costs while boosting load factors. However, that would pitch Ryanair holidays directly against the OTAs, making for potentially uncomfortable relations once more.
The summer of 2024 has seen demand for package holidays rise once more, following years of stagnation in the market as travelers preferred to create their own flight and accommodation itineraries.
“Accommodation in the Canaries, Spain, Italy, Greece, has been appreciably more expensive, and that has maybe pushed more people into these kinds of holiday packages,” O’Leary said.
Ryanair’s two main leisure airline rivals, Jet2 and easyJet, both have established package holiday divisions that were both expected to return high profits for their respective airline parent companies.
Since its launch in 2019, easyJet Holidays has established itself as a major player in the sector in its own right and is forecast to return a pretax profit of over £180m ($229m) in 2024. Meanwhile, in June 2024, Jet2 announced profits of £520 ($660m), the highest in its history.
