Budget airline EasyJet halved its losses in the final three months of last year amid booming demand over the Christmas period, Jessica Clark.

The low-cost carrier said it is on track to hit its medium-term target of more than £1bn profit after a strong performance over the traditionally quieter winter period.

It reported a pre-tax loss of £61m for the three months to December 31, down from £126m a year earlier, due to a 7pc jump in passengers and cheaper fuel prices.

And the FTSE 100 firm said 2025 is set to be a bumper year as a million passengers have already booked flights and holidays for the summer.

It comes after Heathrow reported a record-breaking festive period as travel continued its post-pandemic bounce.

And UK Chancellor Rachel Reeves is reportedly looking at whether to support plans for a third runway at the London airport - as well as expansions at Gatwick and Luton.

EasyJet expects to meet forecasts of £709m profit this year after around 21.2m passengers flew with the firm in the final three months of 2024, up from 19.8m a year earlier.

The money it makes from selling extras such as baggage allowance and priority boarding increased 10pc from £486m to £535m.

And its package holiday business increased sales by 36pc from £181m to £247m.

Total revenue was up 13pc.

In-demand destinations for the summer include Palma and Alicante in Spain and Faro in Portugal.

Tunisia and Egyptian capital Cairo have also proved popular.

Richard Hunter, head of markets at Interactive Investor, said: “EasyJet may have posted its usual and expected winter loss, but on closer inspection, the group has made substantial progress which should ensure another year of growing profitability,” adding “the reduction of losses should provide a tailwind for the remainder of the year.”

John Moore, a senior investment manager at RBC Brewin Dolphin, said: “EasyJet's results confirm good growth in sales and an improving picture in terms of profitability.”

He added issues at Boeing, hit by strikes and safety issues, should not have a big impact.

The only other “cloud on the horizon” is “concerns about post-Budget consumer sentiment”, he said, adding: “Forward bookings are robust and the holidays business continues to deliver strong growth.

“EasyJet should make £10bn of sales this year.”