Ryanair Considers Launching Package Holiday Division in 2025

Ryanair, Europe’s leading low-cost carrier, is exploring the possibility of entering the package holiday market, a move that could have significant implications for the European travel industry. The airline’s CEO, Michael O’Leary, recently hinted at the potential expansion during an interview with the UK’s Telegraph newspaper, suggesting that Ryanair may soon offer flight and accommodation deals to its vast customer base.

With more than 100 million passengers flying with Ryanair annually, the airline is well-positioned to capitalize on the growing demand for package holidays. This strategic consideration comes on the heels of the success stories from competitors like easyJet and Jet2, both of which have established profitable package holiday divisions.

O’Leary acknowledged the opportunity, stating, “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.” He also indicated that Ryanair would explore this option further once the airline maximizes growth from its expanding fleet.

Ryanair’s potential entry into the package holiday market aligns with its history of challenging established norms and aggressively expanding its business model. The airline has previously clashed with online travel agents (OTAs) over unauthorized sales of its flights. However, in recent months, the Ryanair Group, which includes Ryanair, Ryanair UK, Buzz, Malta Air, and Lauda Europe, has begun to forge closer relationships with some OTAs, allowing them to sell package holidays that include Ryanair flights.

Despite these developments, O’Leary expressed a preference for bringing package holiday customers in-house, aiming to reduce costs by eliminating commission fees paid to OTAs and increasing load factors on Ryanair flights. Such a move would likely reignite tensions between Ryanair and OTAs, potentially leading to a competitive battle within the industry.

The timing of Ryanair’s potential expansion into the package holiday market is notable. After years of stagnation, demand for package holidays has surged in the summer of 2024. Rising accommodation costs in popular European destinations such as the Canary Islands, Spain, Italy, and Greece have pushed more travelers toward package deals, which offer a more convenient and often more affordable option.

“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 explained.

Ryanair’s main rivals in the leisure travel sector, Jet2 and easyJet, have already reaped significant rewards from their package holiday offerings. easyJet Holidays, launched in 2019, has quickly become a major player in the market and is expected to deliver a pretax profit of over £180 million ($229 million) in 2024. Similarly, Jet2 announced record profits of £520 million ($660 million) in June 2024, highlighting the profitability of the package holiday sector.

If Ryanair moves forward with launching its own package holiday division, it would likely intensify competition in the market, offering consumers more choices and potentially driving down prices. As the airline reviews its options, the travel industry will be watching closely to see how Ryanair’s next move could reshape the landscape of European holidays.