Tour operator First Choice has reported a rapid recovery in sales of holidays following the Asian tsunami, which cost it more than £1 million.

First Choice said the catastrophe in Asia had significantly disrupted the market in the first two weeks of January, but sales of mainstream summer breaks were now 18pc higher than a year ago.

Nearly 1,200 customers were affected by the tsunami and the company laid on rescue flights to bring them back home, while refunds were among the options offered to travellers due to fly to destinations in the disaster-struck region.

Despite the extra financial burden caused by the tsunami, First Choice said the current outlook was encouraging and it was confident of meeting full-year expectations.

It did not specify levels of demand in individual regions.