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* Flights to beach resorts boost demand
* Revenue better than company had forecast in May
* Holiday Britons benefit from weaker euro (Adds analyst comment)
By Sarah Young
LONDON, July 22 (Reuters) - British low-cost airline easyJet forecast annual profit growth of up to 14 percent,helped by higher demand for beach holidays which calmed fears ithad raised over its outlook.
Revenue performance in the three months to the end of Junewas better than easyJet had forecast in May, boosted byincreased demand for flights to southern European resorts suchas Malaga, Alicante and Faro from northern Europe, and Britainin particular.
Shares in easyJet, Europe's second biggest budget airlineafter Ryanair, gained 4.3 percent to 1,739 pence at 0840GMT, their highest level since mid-May.
The strength of the pound against the euro is makingholidays on the continent particularly appealing for Britonsthis year. The euro hit a 7-1/2-year low against the pound lastFriday, having shed around 10 percent against thecurrency since the start of the year.
EasyJet did, however, warn that it faced a series ofuncertainties in future given the crisis in Greece, a bloodyattack on tourists in Tunisia, the impact of a fire at Fiumicinoairport in Rome and various threats of industrial action.
Despite these uncertainties, it forecast profit growth ofbetween 7 percent and 14 percent for the year to the end ofSeptember, putting it on track to meet analyst forecasts for a10 percent rise.
The company's warning over revenue per seat in May haddragged on the stock. Before Wednesday, easyJet shares hadfallen 9 percent since the statement in mid-May compared to a 10percent rise in Ryanair's stock.
The divergent performances reflect concerns about Ryanair'smove into what has traditionally been easyJet's territory, afterthe Irish carrier polished up its image and started adding moremain city airports to its routes.
But some analysts believe those fears are overdone. Ryanairand easyJet compete directly on less than 5 percent of routes,and easyJet is years ahead of Ryanair in having built a networkbased on so-called primary airports closer to large cities.
The easyJet strategy would help it continue to win in whatit called a "more competitive market," the company said.
Analysts said investors would be relieved by this latest update from easyJet.
"With all the concerns that the market has had about excesscapacity in the market and the likely impact on yields, webelieve that these results will be well received," Numis analystWynn Ellis said, referring to yield, a measure of pricing perpassenger. ($1 = 0.6407 pounds) (Reporting by Sarah Young; editing by Kate Holton and KeithWeir)
