EasyJet has relaunched its package holiday business as it looks to increase customer numbers following the collapse of major competitor Thomas Cook.

It made the announcement as it reported diving profits despite record passenger numbers in the year to September, as it was hit by “some weakness in consumer confidence”.

The budget airline reported a 26% drop in pre-tax profits to £427 million for the 12 months to September 30.

Meanwhile, revenues jumped by 8.3% to £6.4 billion on the back of increased capacity.

However, total revenue per seat decreased by 1.8% to £60.81 through the period, as the company blamed weaker confidence due to “uncertainty” surrounding Brexit.

It said revenue per seat was better in the second half of the year, due to its initiatives as well as the positive impact of strikes at rivals British Airways and Ryanair.

Headline costs per seat increased by 1.5% to £56.74 as higher fuel costs and adverse foreign exchange rates put pressure on profitability.

EasyJet said it hopes to make progress in 2020 through the launch of easyJet Holidays before Christmas, which it says will offer beach and city holidays through easyJet’s network.

It said it expects the new platform to break even in the 2020 financial year.

The company said the launch of the package holiday arm has been in the pipeline for at least 18 months and easyJet “didn’t change” its plans after the collapse of Thomas Cook.

However, chief executive Johan Lundgren said it “clearly impacts the market” when a major player is no longer around.

The company said the exit of Thomas Cook also gave it more opportunities related to potential holiday partners, with hoteliers and local operators “still looking to regain that lost volume”.

Mr Lundgren added: “EasyJet finished the 2019 financial year with a strong performance across the business and a record summer.

“I am really thrilled that, with the launch before Christmas of our brand new easyJet Holidays business, we are bringing flexibility and excellent value to the holiday market.

“We believe there is a gap in the market for a modern, relevant and flexible business for today’s consumer.”

The airline also announced plans to become the “first major airline to operate net-zero carbon flights” as it pushes forward with a sustainability programme which will see it offset the carbon emissions from the fuel of all of its flights.

It said it will invest in forestry, renewables and community-based projects to offset its environmental impact.

The firm highlighted that it is “only an interim measure” while new technologies are being developed, including efforts to develop hybrid and electric planes.