British airline EasyJet is relaunching its package holiday business and said it would become the world's first major net zero carbon airline by off－setting carbon emissions.

The budget airline said it would start off setting all flights, which it said would cost about 25 million pounds ($32 million) in the next financial year through schemes to plant trees or avoid the release of additional carbon dioxide.

But activist group Greenpeace labeled the Easyjet move as "greenwash", or exploiting the consumer trend to the carrier's benefit without taking more dramatic action to off set emissions.

Changing consumer behavior with a frequent-flier tax to reduce the number of flights is the only way to get closer to zero-carbon, the environmental group said.

EasyJet chief executive Johan Lundgren told the BBC's Today program: "This is not a long-term solution, off－setting is not perfect.

"I don't think it's greenwashing, everyone recognizes that it works, but this is in addition to the fact that since 2000, we've reduced our carbon emissions by 30 percent."

In a statement released earlier, he said: "Our priority is to continue to work on reducing our carbon footprint in the short term, coupled with long-term work to support the development of new technology, including electric planes, to reinvent aviation for the long-term."

The company announced it is set to work in partnership with manufacturer Airbus 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".

EasyJet has also relaunched its package holiday business as a standalone division, looking to increase customer numbers following the collapse of its major competitor Thomas Cook.

The airline said it had conducted research which showed its customers wanted flexibility in flights and tailored holidays, and it had designed its business to respond to this.

Last week the boss of rival budget airline Wizz Air, Jozesf Varadi, said he was "surprised" to hear of EasyJet's package holiday plans.

He told the Daily Telegraph: "I don't think this packaged holiday industry is going to flourish, I think that the model is outdated, why should customers pay a premium for pretty much nothing?"

Explaining the decision to relaunch its package holidays, EasyJet said: "The total European package holidays market is worth around 61 billion pounds per year. The UK alone is a 13 billion pound market and has grown by 6 percent annually.

"The way that customers are taking holidays is changing and we know customers want holidays with various durations and not the traditional seven and 14 nights."

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 capitalize on the market in Europe.