Europe's second largest low-cost carrier said on Thursday revenue jumped 16.7 percent to 763 million pounds in the three months to December, as passenger numbers rose 8.1 percent to 12.9 million in its first quarter.

Analysts at UBS had expected sales of 730 million pounds.

The Luton, southern England-based company said costs per seat, excluding fuel, fell 1.6 percent during the quarter, and it expected its seasonal first-half loss to be roughly the same as in 2010/11.

"Assuming no significant disruption in the second quarter, easyJet expects to recover most of the 100 million pounds increase in its first-half fuel bill and contain first-half losses to between 140 million pounds and 160 million pounds compared to the 153 million pounds loss reported in the first half of last year," chief executive Carolyn McCall said.

Shares in easyJet, which have risen 12 percent in the past three months, were up 7 percent at 432.2 pence by 0845 GMT, valuing the company at around 1.7 billion pounds.

"Carolyn McCall's second full year in charge is off to a good start, helped by the mild winter weather. Both pricing and cost control have been strong," said Charles Stanley analyst Douglas McNeill, who retains a "hold" rating on the stock.

EasyJet's European peers have struggled to overcome high oil prices and sluggish demand in recent months, with low-cost airlines expected to pick up more business as struggling European consumers trade down.

German group Lufthansa (LHAG.DE) and Air France-KLM (AIRF.PA) have cut profit forecasts after being battered by fuel costs and slashed plans to expand in 2012.

Industry body IATA recently said it expected airlines to suffer this year due to waning consumer confidence, sluggish international trade and high fuel prices.

McCall said she was "cautiously confident" in the outlook for the business, despite the tough economic environment and the negative impact of a weak euro.

Last year, easyJet agreed a string of deals aimed at giving it a larger share of the business travel market.

The airline said some 200,000 more business passengers flew with the carrier in the quarter year-on-year, despite a general decline in business travel.

EasyJet, the largest airline at London's Gatwick airport, expected to grow seats flown by around 3 percent for its first half and by around 5 percent for the full year. It said around 70 percent of available seats for the first half were already booked.

Late last year easyJet paid its first dividend after full-year profit rose a third.

(Editing by Neil Maidment and Dan Lalor)

• A Permanent Economic Emergency