Low-cost airline easyJet today said annual profits would be nearly 50% higher after strong passenger growth last month. The operator carried 14.2% more people in September than last year.

That means total passenger numbers of 37.2 million for the year ending 30 September. Despite competition on fares and the doubling of UK air passenger duty (APD), easyJet said profits growth will be at the top of its earlier guidance of between 40% and 50%.

The airline will exceed market expectations with a £11 million one-off benefit from reclassifying its investment in the UK's air traffic control company. EasyJet said its profits performance reflected 'substantial improvement' in operating costs, with the second half figure - excluding fuel - set to be 10% lower than a year ago.

That offset a fall in total revenues per seat of 6.8%, which easyJet said was in line with guidance after it pledged to offer Europe's lowest fares. During the winter it expects total revenues per seat, including from bag charging, to be broadly in line with last year.

The airline will add 15% new capacity, with growth likely to continue to focus on southern Europe, including Milan and Madrid, where it has 12 aircraft. Chief executive Andy Harris said: 'We are pleased with our performance over the last financial year having achieved significant improvement in margins despite the doubling of APD in the UK and record fuel prices.' Shares were up 22p or 4% in early trading to 569.5p.