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* H1 loss of 24 mln stg vs 7 mln profit last yr
* Plans to raise dividend payout ratio by a quarter
* Says on track to meet full-year analyst forecast
* Shares up 2 pct (Adds CEO comments, analyst comment, share price)
By Sarah Young
LONDON, May 10 (Reuters) - British budget airline easyJet said strong demand for beach holidays was making up fora drop in travelling in the wake of recent attacks in Europe,and raised its dividend in a sign of its confidence.
Europe's No.2 low-cost carrier is facing an increasinglycompetitive market as larger rival Ryanair and othersadd capacity and low fuel prices help all airlines to cut fares.
But the company said on Tuesday it remained confident aboutfuture growth, announcing plans to increase its dividend payoutratio by a quarter to 50 percent of post-tax income, subject toapproval at its annual shareholder meeting.
At 0945 GMT, its shares were up 2 percent at 1,500 pence.
"Second half pricing guidance implies easyJet is much moreconfident on the peak summer quarter, citing beach routes inparticular," Barclays analyst Oliver Sleath said.
For the 12 months to Sept. 30, easyJet expects to postpretax profit in line with analyst estimates of 721 millionpounds ($1 billion), despite reporting a 24 million pound lossin the first-half, swinging into the red after making a 7million pound profit in the period last year.
Attacks in Paris in November and in Brussels in March hitdemand for flights, prompting easyJet to cut prices to encouragebookings and weighing on the results.
Other European airlines including Ryanair, BritishAirways-owner IAG, Lufthansa and AirFrance-KLM have warned recently about the impact ontourism from the attacks.
EasyJet's first-half results also suffered from cancelledflights to the Egyptian resort of Sharm el-Sheikh over securityconcerns and air traffic control strikes in France.
"This half has had external events that we haven't seen comeclose together in this way for over a decade," Chief ExecutiveCarolyn McCall told reporters.
"April was particularity awful on yields because of Brusselsand the tail-end of Paris, but there's an improving trajectoryon that for May and June."
The airline was seeing strong demand for beach holidays inSpain, Portugal, Italy and Greece, McCall added.
Ryanair is due to announce results for the year ended Marchon May 23.
EasyJet said it would focus on keeping down costs, setting atarget out to 2019 of flat unit costs at constant currency andexcluding fuel.
As it grows, the airline is considering larger Airbus A321jets for its fleet, which is currently focused on the A320.McCall said it was conducting a "rigorous review" to ensure thebigger plane would be compatible with its operations.
($1 = 0.6924 pounds) (Editing by Kate Holton and Mark Potter)
