EasyJet has forecasted losses of more than £500m after the Omicron variant led to travel restrictions - but the budget carrier says it is on the route to recovery.

The low-cost carrier, which along with rivals such as British Airways has cancelled hundreds of flights due to staff shortages, said bookings are ahead of pre-pandemic levels despite the chaos at airports.

The surge follows the end of travel restrictions in the UK and is a welcome boost for an industry reeling from the pandemic.

According to the Daily Mail, the budget air carrier predicts making a headline pre-tax loss of between £535million and £565million for the six months to 31 March, a drop of less than a quarter from the same period in the previous year.

This was despite a surge in bookings after the UK Government announced a relaxation to travel rules in late January following the successful implementation of a Covid-19 vaccine booster programme.

Before that, the UK airline industry had been hit by two months of tougher travel restrictions introduced in response to the spread of the Omicron variant of coronavirus.

The rules had an effect on short-term demand, which came on top of higher fuel prices, the end of furlough support, and the costs of expanding operations to cope with the increase in bookings.

Although it forecasts reporting a significant first-half loss, EasyJet has managed to exceed expectations, with capacity in the final month of the period hitting 80 per cent of pre-pandemic volumes, the Mail said.

Between January and March, the Luton Airport-based group flew 11.5 million passengers, compared to just 1.2 million during the equivalent time in 2021.

The Mail quoted EasyJet chief executive Johan Lundgren as saying: "Since travel restrictions were removed, EasyJet has seen a strong recovery in trading which has been sustained, resulting in a positive outlook for Easter and beyond, with daily booking volumes for summer currently tracking ahead of those at the same time in FY19.

"We remain confident in our plans which will see us reaching near 2019 flying levels for this summer and emerge as one of the winners in the recovery."

It comes amid mass flight cancellations across UK airports as the start of the Easter school holidays led to a rush of Britons looking to get away for a foreign break.