By Joanna Plucinska and Yadarisa Shabong

(Reuters) -British airline easyJet reported a smaller first-quarter operating loss on Wednesday on easing fuel costs and strong passenger demand for travel and its holiday packages.

It posted a loss of 40 million pounds ($49.27 million) for the three months to Dec. 31 versus a loss of 117 million a year earlier.

“Looking to this summer, we have seen continuing demand for easyJet’s flights and holidays where we have one million more customers already booked, with firm favourites like Palma, Faro and Alicante,” new CEO Kenton Jarvis said in a statement.

European airlines are hoping that stable fuel prices and demand will help their performance this year after spiralling costs and geopolitical turmoil weighed in 2024. European airline shares are broadly down on the year.

EasyJet shares were down by almost 5% in early trade with analysts pointing to slightly weaker expected second quarter revenue outlook though the outlook for the summer remains positive.

The first quarter is usually the weakest for airlines as fewer customers travel between January and March.

Jarvis, who was the airline’s finance chief, took over the top role from Johan Lundgren earlier this month with a promise of continuity on executing easyJet’s mid-term growth plan.

The airline confirmed it remained on track to meet its target of one billion pounds profit before tax.

Jarvis said easyJet was set to receive all nine expected new Airbus aircraft, unlike other airlines, which will allow for capacity growth.

New CFO Jan De Raeymaker also joined easyJet this week from rail freight firm Lineas.

The carrier said current booking trends were supportive of it meeting attaining the 709 million pounds in 2025 pretax profit forecast by analysts in a company-compiled consensus.

Its holiday business, which has helped bolster its profits in recent years, is set for 25% growth.

Stability in the Middle East, including a recent ceasefire deal between Israel and Hamas, could offer a further respite, allowing carriers to relaunch cancelled routes.

EasyJet plans to resume limited flights to Tel Aviv in June and to expand services later on, it said this week.

($1 = 0.8118 pounds)

(Editing by Rashmi Aich and Jason Neely)