The news follows the collapse of rival travel company Thomas Cook in September, which left behind 22mln former customers and a £10bn gap in the market.
Analysts at Shore Capital said that with an estimated margin of €40 per passenger, two million additional seats “could provide an incremental €80-90m to TUI’s bottom line”, which could also create a “halo effect” for the group’s hotels.
The extra seats will be added across flights to Turkey, Greece, Balearics, Canaries, Egypt, Mexico and Florida.
Tui’s in-house airline also said it will create jobs for more than 100 pilots and over 200 cabin crew, with many to be recruited from its former competitor.
Shore Capital called Thomas Cook’s downfall a “game changer for incumbent operators”, and also noted Jet2 airline owner Dart Group’s recent reports of higher demand.
Shares were nudged up 5% to 963.4p in early trading on Friday, slightly below last month’s high of 974.2p.