Icelandair, linked to market talk it might raise its stake in Britain's easyJet, said its 9 month after tax earnings rose ISK1 billion krona (USD$15 million) year-on-year to ISK2.7 billion (USD$40.6 million).

"These results demonstrate the strength which has been built into the operations in the last few years," Icelandair chairman Sigurdur Helgason said in a statement.

The carrier's income in the first nine months was ISK34 billion (USD$511 million) while operating costs were ISK31 billion (USD$465.9 million).

"Icelandair is getting good operational results for the third year in a row, while most carriers in our part of the world have been struggling," he added. "It has enabled the company to progress and aim for organic and external growth."

Helgason said Icelandair planned to continue to expand, and had increased its capital by 10 percent for this purpose.

Icelandair owns 10 percent of easyJet, whose shares earlier rose on stock market talk of a possible takeover bid. EasyJet played down such an idea, although it said the two companies' biggest shareholders met this week.

EasyJet said it was not aware of any immediate plans by Icelandair to raise its stake.

Icelandair Chairman Hannes Smarason met easyJet founder Stelios Haji-Ioannou in London on Wednesday. A spokesman for Haji-Ioannou's easyGroup said Smarason instigated the meeting but there were no major announcements arising from that.

Smarason owns 32.2 percent of Icelandair. Haji-Ioannou, along with his family, owns about 41 percent of easyJet.

Reykjavik-based Icelandair is the country's largest company and is owned by about 5,000 Icelandic shareholders.

EasyJet will report annual earnings on Tuesday next week.

(Reuters)