Britain's largest low-cost airline, EasyJet, predicted a fierce battle with "desperate" ski charter operators this winter after revealing that cut-throat competition in Europe's skies had ripped into its underlying profits.

The carrier, based at London-Luton Airport, reported a 21 per cent increase in pre-tax profits to £62.2 million (€89 million) for the year to September.

But after stripping out the impact of depreciation, write-offs on investments and last year's integration of Go, it admitted that its underlying earnings fell 11 per cent. New routes and extra planes meant the airline's passenger numbers jumped by a fifth to 24.3 million.

But its revenue per customer dropped by 2 per cent to £44.82 million.

Chief executive Mr Ray Webster said that it would be a harsh winter for the industry: "What I'm anticipating is fierce competition and therefore low fares - which is great for consumers but tough for airlines."

He said he was particularly concerned about the number of unsold airline tickets which charter holiday companies could dump onto the market in time for the ski season from January.

"They're cornered, they're desperate and therefore we've got to consider them a big threat," said Mr Webster.

The airline has sounded two profit warnings over the last year and has slowed down its expansion plans by delaying the delivery of three new planes.

The company pointed out that it was facing competition from "at least 47 low-cost airlines in Europe".