EasyJet is set to become the world’s first major airline to operate net-zero carbon flights across its entire network, after announcing it would offset all jet fuel emissions.

The British budget airline said it would start offsetting all flights from Tuesday, which it said would cost about £25m in the next financial year through schemes to plant trees or avoid the release of additional carbon dioxide.

Johan Lundgren, the airline’s chief executive, said longer-term solutions were also needed. “We recognise that offsetting is only an interim measure, but we want to take action on our carbon emissions now,” he said. “Aviation will have to reinvent itself as quickly as it can.”

EasyJet’s move surpasses the recent pledges of rival airlines, including British Airways, whose parent company, IAG, promised last month to be carbon-neutral by 2050 and to start offsetting all domestic flights next year.

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The German airline group Lufthansa has launched a business fare where European flights are automatically offset for corporate customers from 2020.

There is mounting pressure on the aviation industry to address its environmental impact. The UN agency ICAO has launched a limited global offsetting programme, Corsia, whereby governments have agreed to offset any growth in emissions, but campaigners argue this does not go far enough.

Lundgren argued that EasyJet was “together, all in all, doing more than any other major airline within this area. Customers increasingly expect companies to do something about it and it is fundamentally the right thing to do.”

The airline said it had secured a relatively low price as it had signed a three-year contract for wholesale offsetting, equating to less than £3 per tonne of CO2 or £25m a year. Lundgren said that the 17 different projects were “verified to the highest standards … audited and monitored to deliver actual offsets”. The airline plans to develop its own schemes to continue offsetting after the three-year period.

EasyJet’s move, however, is unlikely to assuage environmental criticism, in a year during which it has launched domestic flights between Birmingham and Edinburgh, which are linked by fast rail routes, and expanded its airline capacity by more than 10%.

EasyJet also announced it had signed a memorandum of understanding with the manufacturer Airbus to work in partnership to develop electric and hybrid electric planes for short-haul European flights. Lundgren said he hoped it would be “an important step towards making electric planes a reality”.

The airline said it would continue working with Wright Electric, a US firm that has developed a nine-seater electric plane expected to start flying in the coming weeks.

Lundgren said easyJet would take further measures including reducing the number of empty seats flown – although the proportion left empty on the average flight increased to 8.5 in every 100 seats last year.

EasyJet reported pre-tax profits of £427m for the year ending 30 September, in line with previous guidance but down 26% on 2018, a drop it ascribed to rising fuel prices and a tough operating environment – although it was boosted by strikes at rivals BA and Ryanair.

A record 96.1 million passengers flew with easyJet last year.

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EasyJet has also relaunched its package holiday business as a stand-alone division, looking to increase customer numbers following the collapse of its major competitor Thomas Cook. A new easyJet Holidays booking site will launch in the UK before Christmas, with the division aiming to at least break even in its first financial year.

Lundgren said that, despite Thomas Cook, the package holiday was “not in any way shape or form in decline” and that easyJet was well placed to capitalise on a market worth £60bn a year in Europe.

EasyJet expects to start flying routes as early as next February using airport slots at Gatwick and Bristol acquired from Thomas Cook’s administrators.