Low-cost airline EasyJet has announced it is to raise its dividend and expand its fleet as it ramps up efforts to boost its market share.

The carrier has pledged to increase the dividend payout ratio from 33 per cent of post-tax profit to 40 per cent in its financial year ending on September 30th, the Financial Times reports.

"This is a company that will be 20-years-old next year. It is now a mature, cash-generative business and shareholders are entitled to get their fair share of the total return," said a spokesman for Sir Stelios Haji-Ioannou, the airline's founder and largest shareholder.

EasyJet is exercising purchase options with Airbus to buy 27 A320 planes and insists it has secured a discount with the aircraft manufacturer.

This forms part of the airline's plan to expand its fleet from 226 to 304 aircraft by 2019. A320 aircraft offer a cost saving per seat of between seven and eight per cent compared to smaller Airbus A319 jets.