Low-cost airline easyJet raised its full-year profit guidance after more corporate passengers flew with the carrier in the second half and said it would return around 190 million pounds to shareholders.

"Our performance continues to be robust, with particular strength on city routes used by business and short break leisure travellers," easyJet's chief executive Carolyn McCall told reporters on Thursday.

"As a result, the board's expectation for profit before tax for the year ending Sep. 30, 2011 is now between 240 million and 250 million pounds compared with our previous expectation of 200 million to 230 million pounds."

The company had been expected to report an annual pretax profit of between 157.2 million pounds and 225 million pounds, with the average at 208 million pounds, according to a poll of seven analysts by Thomson Reuters I/B/E/S.

Shares in easyJet, which have fallen a quarter in 2011, were 6 percent up at 330.25 pence by 8:47 a.m., valuing the company at around 1.6 billion pounds.

"Current trading is clearly encouraging and contrasts clearly with the recent profit warning from Lufthansa," said Espirito Santo analyst Gerald Khoo.

"This supports our view that the low cost carriers are likely to perform relatively robustly compared with the network carriers in tough trading conditions."

German airline Lufthansa warned on Tuesday of disappointing booking trends and said it no longer expected to improve on last year's operating profit.

The Luton, southern England-based airline said it would pay a dividend of 9 pence per share for the year and had decided to return a further 35 pence per share by way of a special dividend in light of the carrier's strong recent performance.

This amounts to a total payout of 190 million pounds or 44 pence per share.

The move could appease easyJet's largest shareholder and founder, Stelios Haji-Ioannou, who earlier this year said he wanted to force a shareholder vote over the airline's plans to buy new aircraft from Airbus.

McCall said easyjet was obliged to call an extraordinary general meeting after Stelios' request and would do so soon.

The budget carrier, which acted last year to lure more corporate passengers, said revenue per seat rose 6 percent in the second half of the year -- at the upper end of its expectations -- and that it had already sold around a third of the seats for the first quarter of its next fiscal year.

EasyJet said the June launch of Flexi Fare -- a service which allows passengers to change the date of their flight up to two hours before the scheduled departure time -- had proved popular with corporate travellers. It added that it had increased frequencies to cities popular with business passengers, which also helped.

"Our city fare strength is very much a reflection that we are getting more traction with business travellers," said McCall.

However, the company added that at current fuel and exchange rates its 2012 fuel bill would likely increase by about 220 million pounds compared to the prior year.

Fuel cost rises tend to weigh more on price-sensitive flights used by tourists and individual travellers.

Despite a recent rebound in economy class travel, rising fuel prices continue to cause trouble for the industry and will knock airline profits by around a third in 2012, hindering the industry's recovery, industry body IATA said on Tuesday.

IATA, however, raised its 2011 estimate by 42 percent to US$6.9 billion, citing stronger-than-expected growth in recent months.