EasyJet said it reduced its losses in the final three months of 2023 despite suffering a £40 million hit from the Hamas-Israel conflict.

The airline recorded a loss before tax of £126 million between October and December last year, down from £133 million during the same period in 2022.

Passenger numbers increased by 14% year on year.

The airline said it expects to suffer a “direct impact of £40 million” in the six months to the end of March due to the war between Israel and Hamas.

This relates to the suspension in flights to Israel and Jordan, alongside a softening of demand for trips to Egypt.

EasyJet chief executive Johan Lundgren said the airline saw a “significant dampening in bookings for a period” but demand “picked up very strongly” from late November.

He also indicated that summer airfares across the sector could face upwards pressure as flight capacity “will probably be tight because of the challenges that some of our competitors have to get their aircraft”.

Delivery delays by aircraft manufacturer Boeing – which does not supply easyJet – are affecting carriers such as Ryanair.

EasyJet was among the airlines which diverted some flights far away from planned destinations on Sunday night due to Storm Isha.

This included a flight from Edinburgh to Bristol which landed in Paris.

Mr Lundgren said: “At certain points throughout the evening there were no options for diversions other than Paris.

“It is obviously inconvenient to say the least for customers who were on domestic flights, but there were relatively few.

“I must say that in the end we prioritise safety so we stand by the captains’ and the pilots’ decisions to do what is safe in those circumstances.”

He added: “I can only apologise but we can’t do anything about the weather.”

In relation to the airline’s financial results for the quarter and future demand, Mr Lundgren said: “We delivered an improved performance in the quarter, which is testament to the strength of demand for our brand and network.

“The popularity of easyJet holidays also continues to grow, with 48% more customers in the period.

“We see positive booking momentum for summer 2024, with travel remaining a priority for consumers.

“Flight and holiday bookings took off strongly during the traditional busy turn-of-year sales period, as customers opted to secure their summer holidays to firm favourites like Spain and Portugal alongside destinations further afield like Greece and Turkey.

“EasyJet remains focused on delivering for our customers in the coming months, while also expecting to deliver continuing performance gains.”

The airline heralded the success of its ongoing sale launched on December 21.

At peak booking periods, it sold enough flight tickets to fill the equivalent of two planes per minute.

The airline announced it has reached a deal with CFM to supply 314 Leap-1A engines to power the 157 Airbus aircraft in the A320neo range it has a firm order for, as well as spare engines.

The companies have also agreed pricing for 200 engines for the additional 100 Airbus planes easyJet has purchase rights for.

This continues a long-standing partnership between the airline and the US-based engine manufacturer.