UK quarantine restrictions on arrivals from Spain have not hit demand as much as feared, according to EasyJet chief John Lundgren.

Industry leaders continue to lobby for a relaxation of restrictions amid fears the bulk of the summer season to Spain and Portugal will be lost.

However, easyJet chief executive Lundgren insisted: “People are flying to destinations where there are restrictions. People have not cancelled bookings to Spain.

“There has been an impact on new bookings, [but] only a handful swapped away from Spain so far. Late summer bookings have performed better than expected.”

Lundgren also reported “higher than expected demand for the summer to Faro” in Portugal, which also remains off the UK’s quarantine exemption list.

He said EasyJet would expand capacity for August and September to 40% of the original schedule, up from the 30% previously planned, owing to “higher than expected demand”.

Lundgren spoke on Tuesday as easyJet reported a £325 million loss for the three months to June.

Yet he said the restrictions on Spain had “created new uncertainty” and argued: “There is an urgent need to target quarantine.”

He added: “The procedures are different throughout Europe. Some airports don’t require face masks. It’s confusing for customers.”

A leading airline source told Travel Weekly: “The situation is more concerning now than two weeks ago. It looked like light at the end of the tunnel and the light is no longer there.

“Stopping and starting creates uncertainty. It’s a fast-moving situation, but it’s difficult to see things changing in August.

“We could see countries coming off the list rather than going on it, and if we get more situations like Manchester what will other countries say about the UK? We’re not hopeful on Spain. It may be in the ‘too hard’ box.”

A senior leisure industry source agreed: “The priority is to press the government for a more consistent and sophisticated approach so we don’t have ‘switch on, switch off’ which is difficult to make work.

“If we could have a test on return, it could be a game changer even with quarantine in place. [But] the chance of advice changing even to the Spanish islands is slight.

“The incremental economic effect is not huge given the overall situation. It’s the reduction in momentum that’s important.”

The airline source said: “Testing is the logical way forward. [But] it’s a big piece of work. It could take a number of weeks.

“The airline industry strongly supports testing for high-risk countries [and wants] testing before departure. It doesn’t support testing every passenger on arrival.”