Disruption from volcanic ash cost airports operator £28m

BAA said the industry as a whole faces "significant financial challenges" in the rest of the year as it revealed the cost of the airspace shutdown and said 1.6 million fewer passengers had used its London airports in April.

The airline sector was hit hard by the six days of restrictions caused by ash from Iceland's Eyjafjallajokull volcano earlier this month.

More than 100,000 flights were cancelled and airlines were thought to be set lose more than two billion US dollars (1.3bn).

BAA said Heathrow and Stansted had given a "resilient" performance in the three months to March 31.

Chief executive Colin Matthews said the period before the ash cloud disruption was already challenging because of enhanced security procedures, heavy winter snowfall and the ongoing strike woes at British Airways, BAA's biggest customer.

However, he said that the London airports had achieved "robust" operational performance in the quarter, while passenger traffic at Heathrow "continues to perform well".

The group said its London airports handled 18.6 million passengers in the period, up slightly on the previous year.

Heathrow accounted for the lion's share of the rise as traveller numbers rose 1.6 per cent to 14.6m, despite the loss of around 180,000 passengers because of the BA industrial action and a small hit from the wintry weather.

It said it was earning more per traveller as net retail income per passenger grew 10.7 per cent.

Overall, losses improved to 195.5m from 316.2m a year earlier but, adjusted for exceptional items, the loss worsened by 26.9 per cent to 125.9m.

Both Heathrow and Stansted were closed from April 15 to 20 because of the ash cloud, with normal airline schedules resuming on April 22.

"The group responded well to the unprecedented challenges resulting from the disruption, in particular re-starting operations effectively following airport closures," BAA said.

"Nevertheless, the closures have resulted in passenger traffic in April at the group's airports being 1.6 million lower than the corresponding period in 2009."

The rest of the year presents significant financial challenges.