Low-cost airline easyJet stepped up its expansion this week by taking up an option with Airbus for the addition of another 27 planes to its fleet.

The current generation A320s will give it 304 aircraft by 2019 but the airline said it has the flexibility to manage the fleet size to between 204 and 316 planes depending on economic conditions and opportunities available.

The Luton-based carrier’s shares rose two per cent on Thursday as it also said its strong financial performance meant it would be able to increase the payout ratio for its dividend from one-third of profit after tax to 40 per cent of profit. More details are expected with the company’s annual results in November.

Chief executive Carolyn McCall said: “EasyJet’s proven strategy continues to deliver significant returns for shareholders which is why we are increasing our payout ratio for the ordinary dividend to 40 per cent.

“We are bringing new aircraft into the fleet as we continue to see a significant number of new profitable opportunities in our core markets in the near term and to maintain our cost advantage.”

With an all-Airbus fleet, easyJet is Europe’s largest customer for the A320. It currently operates 226 A320s and in June last year became a customer for a more fuel-efficient version of the A320, with an order for 100 aircraft.

Major shareholder and easyJet founder Stelios Haji-Ioannou has been a vocal opponent of the company’s expansion strategy.

But McCall said: “The continued strength and execution of our business model provides the platform to deliver sustainable growth and attractive cash returns for shareholders .”