EasyJet has raised its full-year profits target as it revealed it was to take on its archrival Ryanair in the Irish airline's home market.

EasyJet, noting the impact of cost cuts, said that profits for the year to the end of this month would exceed £60 million, representing a year-on-year rise of at least 16 per cent. The carrier has prepared investors to expect only a mild profits improvement.

The airline said that the improvement reflected expected growth of 16 per cent, to 24.2 million, in passenger numbers over the year and a success in dropping some airports, such as Zurich, with higher charges while cutting capacity on Copenhagen and Amsterdam routes.

"I'm pleased to report that the actions we are taking to strengthen our competitive position have begun to pay off," Ray Webster, the easyJet chief executive, said.

The company also revealed it was to fly to the Republic of Ireland as it launched a thinly veiled attack on the fares policy of Ryanair, Europe's largest budget airline and a bitter competitor in the low-cost carrier market.

Air fares in the Republic have, "in many cases remained stubbornly high and have generated consistently strong year-round returns for the incumbent airline", Mr Webster said. The attack comes the week after Ryanair dismissed as "a joke" easyJet's commitment to punctuality, adding: "Ryanair delivers and easyJet delays".

From January, EasyJet will launch flights from Gatwick to Knock, Cork and Shannon, destinations Ryanair serves from London Stansted.

However, easyJet said that despite the launch of Irish services and an increase in flights to Almeria and Valencia in Spain, a fleet expansion programme would stop at 108 aircraft instead of the 115 earlier targeted. The company operates 93 planes at present.

EasyJet also warned that yields were expected "to remain under pressure" next year, echoing forecasts by Ryanair, which has predicted that the stiff level of competition among European carriers would prompt airline collapses.

While analysts applauded the raised profits guidance, the cut to the expansion programme raised some concerns. Merrill Lyncyh said that the decision might hinder easyJet's plans to reap economies of scale.

EasyJet shares stood 3.25p lower at 135.75p in morning trade.

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