British airline EasyJet said today it had seen some softening in demand in its first quarter following Covid-19 outbreaks such as the Omicron variant, but it remained well placed to handle the uncertainty.

The group, which has cut costs and prioritised the strongest routes, said it had seen an encouraging start to the October 1 year.

It reported strong demand returning for peak winter holiday periods and increasing demand for summer bookings.

Revenue booked for the second half of its financial year is ahead of 2019 levels, and it is increasing its fleet plan by 25 aircraft, with slots added at Gatwick, Porto, Lisbon and Milan's Linate.

Airlines have been on a roller-coaster of a ride this year, steadily recovering in the first half as first Europe and then Britain reopened for travel.

But then fears started to grow about the pace of the recovery as new Covid outbreaks emerged.

Airline shares plunged on Friday as news of the Omicron variant of the coronavirus broke. Low-cost group Ryanair had already warned that European airlines were in for a fraught end to the year as infection rates in Europe surged.

EasyJet's chief executive Johan Lundgren said the airline had become more flexible during the pandemic.

It had switched quickly to in-demand routes, cut costs and bolstered its balance sheet, which would enable it to cope with renewed bouts of volatility.

"In summary, we remain mindful that many uncertainties remain as we navigate the winter, but we see a unique opportunity for easyJet to win customers and take market share from rivals in this period," he said.

The group reported a headline loss before tax of £1.14 billion for the year to the end of September, at the higher end of forecasts, and said first-quarter capacity was expected to be up to around 65% of 2019 levels. It had previously forecast 70%.

For summer 2022 - the fourth quarter of its financial year -it expects capacity to have recovered close to 2019 levels.

It did not give a full financial outlook however as customers book flights closer to departure, preventing clear visibility.