Aer Lingus made an operating profit of €233m for last year, an improvement of €109m over the previous year on a like for like basis.
The airline's capacity rose by 9.6% with the introduction of two additional Airbus A330s to support its longhaul expansion, including new destinations such as Los Angeles and Newark in the US.
But due to significant industry pressure, the airline's passenger yields were down last year.
The company, which is owned by the IAG Group, said the increase in operating profit reflected the benefit of a lower fuel price environment and cost savings, partially offset by the revenue weakness.
IAG's chief executive Willie Walsh said today that Aer Lingus looks forward to competing aggressively on transatlantic routes with Norwegian and will take its opening offering "with a pinch of salt".
Mr Walsh said Aer Lingus sees opportunities for further expansion and has a better cost base than Norwegian.
He said Norwegian is "just another competitor" and that Aer Lingus will compete on "price and service' and offers a very different product to what the airline is offering.
Mr Walsh said that while he is a fan of what Norwegian has done, the company does face significant financial performance challenges.
The IAG boss also said that he supports the continuation of US pre-clearance at Dublin and Shannon airports, which he said gives a competitive advantage to the country and attracts airlines in.
He said it provides greater capacity to the US from Shannon and Dublin .
Mr Walsh said the proposed US travel ban is just another regulation airlines will adapt to.
He also said he believes Brexit will continue to weaken the pound this year, which will affect IAG's sterling profit base.
IAG to buy back shares after solid results
Aer Lingus owner IAG said it will return €500m to investors after reporting higher annual profits, helped by cost-cutting and lower fuel costs.
Europe's largest airline group said annual operating profit rose 8.6% to €2.5 billion, in line with expectations, sending shares up 2 percent. It said it expected higher profits this year.
IAG's British Airways transatlantic business, based at London's Heathrow, has held up well compared to Europe's highly competitive budget market.
IAG's chief executive Willie Walsh said that across IAG he expected 2.5% capacity growth in 2017, with Aer Lingus expected to grow quicker than British Airways.
For 2016, IAG's operating profit before exceptional items rose despite revenue slipping by 1.3% to €22.57 billion.
It benefited from a lower fuel price environment and cost savings, the company said.
The company was hit, however, by an adverse currency impact of €460m after a slump in the British pound following Britain's June 23 vote to leave the European Union.
Analysts expect IAG, which also owns Spain's Iberia, to achieve a 2017 profit of €2.5 billion, in line with this year, Thomson Reuters data showed.
IAG said it planned to carry out a share buyback of €500m this year, and announced a final dividend of 12.5 cents per share.
