BAA, Britain's main airport operator, saw its first-half profits soar by 16% as demand surged among holidaymakers and business travellers for long-haul flights from Heathrow.
The company announced that its pre-tax profits had jumped from £312m to £363m, despite a £6m write-off on the closure of a central London check-in facility and a £7m provision to cover a legal battle with Ryanair.
Its chief executive, Mike Clasper, said the results reflected a strong recovery in long-haul traffic following the impact last year of the war in Iraq and the Sars crisis. The shares rose 2p to 575.5p.
"Passenger growth has been really strong, particularly on North Atlantic routes," he said. "The world economy is strong and there's no doubt that there is latent demand from British holidaymakers to explore further afield."
However, the figures came under immediate attack from the Irish low-cost airline Ryanair, which is suing BAA over the level of airport charges at its biggest base, Stansted.
Ryanair's chief executive, Michael O'Leary, said BAA's earnings exceeded the combined profits of all the airlines flying to and from Britain. He said: "This confirms our view that BAA is a gold-plated, overcharging monopoly which should be broken up."
BAA operates seven UK airports including London's three largest hubs - Heathrow, Gatwick and Stansted. Carriers have accused it of spending too much money on elaborate facilities at Stansted and of forcing smaller airlines to contribute towards Heathrow's fifth terminal, which will only be used by British Airways.
Mr Clasper described Mr O'Leary's remarks as "disingenuous" and said: "He talks a lot of stuff even he doesn't believe. While Ryanair are running a campaign, we're just trying to get on with things."
Heathrow's profits jumped by 11% to £212m, with lucrative transatlantic traffic up by 15.2%. BAA said the airport's £4.2bn fifth terminal was 45% complete. However, the company revealed it was scrapping its check-in hall at London's Paddington station, which opened in 1999 as a first step in a broad strategy of providing city-centre bag drops for all its main airports.
Mr Clasper said the 27 desks had fallen victim to the fall-out from September 11 and to security fears, which made passengers reluctant to part with their luggage early.
BAA has made progress towards settling a row over facilities at Heathrow by striking an agreement allowing the Star Alliance's 15 carriers to move into a refurbished terminal one in 2008.
Star Alliance members, which include BMI and United Airlines, had threatened to sue on the grounds that they would get inferior facilities to BA's planned operations at terminal five.
Outside the south-east, BAA said passenger numbers at Southampton airport had jumped by 16.9% owing to an increase in low-cost flights. Aberdeen turned in a 4.8% rise, its first sustained increase since 2002, due to new routes operated by BMI.
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