It says bookings are looking strong, and it's on track to deliver a full-year profit as a result.

On Wednesday (January 25) the airline reported a pre-tax loss of about $164 million for the quarter to the end of December.

But things are now looking up.

EasyJet says its loss in the first half should be well down on a year ago.

Its holidays unit also lifted expectations, forecasting 50% growth in customer numbers.

Chief Executive Johan Lundgren said people were prioritising time off.

He said travellers were turning to easyJet amid a cost-of-living squeeze, with record-breaking revenue over some recent weekends.

The numbers will fuel optimism over a travel recovery.

Earlier this month, rival Ryanair said it was expecting a very strong summer season.

EasyJet shares surged about 10% in early trade.

Ryanair gained over 3%.