EasyJet planesImage source, Getty Images

People are protecting their spending on holidays despite the cost-of-living crisis, the boss of EasyJet has said.

Johan Lundgren told the BBC the airline had seen strong demand for flights over half term, Christmas and New Year despite the “pressure” on households.

However, he said demand outside peak periods remained below usual levels.

It came as the low-cost carrier reported a sharp bounceback in sales and narrowed its losses for the year to 30 September.

The company said it had faced “multiple headwinds” in the period, including Covid restrictions and the impact of Russia’s invasion of Ukraine, which drove up fuel prices.

However, Mr Lundgren told the BBC’s Today programme that there was “a great deal of pent-up demand” this summer despite the uncertainty surrounding the state of the economy.

“At the same time we see there is a strong demand in the peak periods,” he said, adding that budget airlines tended to do well in downturns because “people gravitate towards value”.

According to a survey of 2,000 people conducted by EasyJet, 64% plan to fly abroad in 2023, while 70% said that they would prioritise a holiday over other expenditure in their yearly budget.

Many said they would cut back on other discretionary spending, such as eating out or buying new clothes, to ensure they could travel abroad.

However, Mr Lungren said the airline needed to do more to “stimulate” demand outside peak periods and there were “big cost increases coming towards the industry”.

Inflation – the rate at which prices rise – is running at a 41-year high in the UK, as energy and food prices have soared.

EasyJet said that, like all airlines, it faced cost pressures including higher fuel costs, a stronger US dollar and demands for higher wages.

Mr Lundgren declined to say how much ticket prices for next summer could rise by.

Rival budget carrier Ryanair has said its prices are rising, with boss Michael O’Leary warning that the era of the €10 ticket is over.

The airline’s average fare would rise from around €40 (£33.75) last year to roughly €50 over the next five years, he told the BBC in August.

According to a recent BBC survey of more than 4,000 adults, 85% are worried about the rising cost of living, up from 69% in a similar poll in January.

As a result, nine in 10 people are trying to save money by delaying putting the heating on.