Beach holidays help easyJet recover from security hit

British budget airline easyJet said strong demand for beach holidays was making up for a drop in travelling in the wake of recent attacks in Europe, and raised its dividend in a sign of its confidence. Europe's No.2 low-cost carrier is facing an increasingly competitive market as larger rival Ryanair and others add capacity and low fuel prices help all airlines to cut fares. But the company said Tuesday it remained confident about future growth, announcing plans to increase its dividend payout ratio by a quarter to 50% of post-tax income, subject to approval at its annual shareholder meeting. "Second half pricing guidance implies easyJet is much more confident on the peak summer quarter, citing beach routes in particular," Barclays analyst Oliver Sleath said. For the 12 months to Sept. 30, easyJet expects to post pretax profit in line with analyst estimates of GBP721m ($1b), despite reporting a GBP24m loss in H1, swinging into the red after making a GBP7m profit in the period last year. Attacks in Paris in November and in Brussels in March hit demand for flights, prompting easyJet to cut prices to encourage bookings and weighing on the results. EasyJet's first-half results also suffered from cancelled flights to the Egyptian resort of Sharm el-Sheikh over security concerns and air traffic control strikes in France. "This half has had external events that we haven't seen come close together in this way for over a decade," CE Carolyn McCall said. "April was particularity awful on yields because of Brussels and the tail-end of Paris, but there's an improving trajectory on that for May and June." The airline was seeing strong demand for beach holidays in Spain, Portugal, Italy and Greece, McCall added.<br/>