Beach holiday boost helping EasyJet to recover from drop after terror attacks

British budget airline EasyJet said strong demand for beach holidays was making up for a drop in travelling in the wake of recent terrorist attacks in Europe, and raised its dividend in a sign of its confidence.

Europe’s second largest 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.

However, the company said it remained confident about future growth, announcing plans to increase its dividend pay-out ratio by a quarter to 50% of post-tax income, subject to approval at its annual shareholder meeting.