UK LCC easyJet used its full-year results conference to announce a series of strategic moves, including the launch of easyJet Holidays, two environmental initiatives and the firming of purchase rights on 12 more Airbus A320neos.

For the year ended Sept. 30, 2019, easyJet’s passenger numbers rose 8.6% to 96.1 million, mirrored by 8.3% revenue growth to £6.4 billion ($8.3 billion). Operating profit for the year totaled £466 million, slightly up from £463 million in the prior year, but net profit dropped from £358 million to £349 million.

“We had a challenging year. There’s no doubt about that, 2019 was more challenging than what we saw in 2018,” easyJet CEO Johan Lundgren said, speaking at a results briefing in London, Nov. 19.

He added that easyJet delivered a record summer performance, boosted by data-driven “self-help initiatives,” including a focus on disruption management. Lundgren said this led to 46% reduction in cancellations and 24% fewer delays of over three hours, compared with the 2018 financial year.

The measures underpinning that improvement included a first-wave flight simulator that predicts on-the-day the impact of disruption, two crewing tools and an air traffic control (ATC) slot predictor, based on historic data. Lundgren said the slot tool alone, which was developed in-house, generated £4 million in savings during the financial year.

“Our target now is to look at what more we can do as we go into next summer as well. It improves the customer experience and reduces our cost. That’s why were so eager to focus on that,” he said.

EasyJet is expecting capacity growth for the year ending Sept. 30, 2020 to be at the lower end of its historic guidance of 3-8% per year. First-half unit revenues and costs at constant currency are expected to be increase in the low- to mid-single digits.

Lundgren also announced that easyJet had firmed up purchase rights on 12 A320neos for delivery in 2024, saying this was linked to a compensation agreement with Airbus for late aircraft deliveries.

In easyJet’s stock market announcement, the LCC disclosed that it has deferred nine A320neos and three A321neos to 2023 and beyond, reducing its 2021 deliveries by 12 aircraft.

As of Sept. 30, easyJet operated 331 Airbus aircraft. Following this latest order, the LCC has 13 purchase options and 58 purchase rights remaining under an agreement signed in 2013.

“Our current fleet plan reflects expected fleet growth to reach 352 aircraft by the end of financial year 2020, 353 aircraft by the end of financial year 2021, 358 aircraft by the end of financial year 2022 and 361 aircraft by the end of financial year 2023,” easyJet said.

Lundgren also used the year-end results briefing to formally launch easyJet Holidays, an initiative which has been in the making since Lundgren became CEO in 2017. The initiative plans to tap the £60 billion European package holiday market and capture up to 20 million easyJet leisure travelers, who currently book their accommodation elsewhere.

EasyJet Holidays is expected to “at least breakeven” in the 2019-20 financial year.

“There are companies that do it well and companies that do it not so well; that’s not to say this isn’t a healthy growing market,” Lundgren said, seemingly making an indirect reference to the recent failure of Thomas Cook.

He added that some tour operators fly to destinations three or four times per week, whereas easyJet flies three or four times daily, giving passengers greater choice and flexibility.

The new easyJet product will be run by a dedicated team of around 100 staff, under the control of a separate CEO. “What I didn’t want to do was to distract the people working at the core of airline to do this work,” Lundgren said.

Passengers will be able to use one easyJet log-in and filter their searches by “almost anything,” including the best value trips, on a technology-driven website. “We are innovating in ways that can’t be found on other sites,” he said.

EasyJet has negotiated direct agreements with around 5,000 hotels, which are shown on Google Maps. Lundgren said several of these hotels have moved away from other partnerships to work with easyJet.

EasyJet Holidays will launch sales in the UK before Christmas to capture the peak-booking season, with the first passenger departures on Jan. 6, 2020. The product will be rolled out to other undisclosed markets in 2020.

While easyJet has spoken with a number of travel agents about potential cooperation, any partnership would have to be low-cost, without adding complexity.

“We are open to working with travel agents. We just have to find a mechanism that is right for us and right for them. That’s what we’re working on at the moment,” easyJet Holidays CEO Garry Wilson said.

EasyJet also announced plans to offset flight emissions across its entire network, along with a new electric-aircraft partnership with Airbus.

Victoria Moores