Passenger numbers rose by 3% in the calendar year

Across the year it handled 144.34 million people - an increase of 3% on the year before.

However, it reported an 8.7% drop in European charter traffic as more airlines operated scheduled services to compete against low-cost carriers.

In December, BAA carried 10.7 million passengers, an increase of 2% annually.

Southampton airport showed BAA's biggest improvement last year, dealing with 1.84 million passengers - a 19.9% rise on last year.

During 2005, Heathrow saw passenger numbers increase by 0.9% to 67.7 million, Gatwick by 4.2% to 32.7 million and Stansted by 2.5% to 22 million, BAA said.

BAA said it now expects the total rise for the full financial year to the end of March to be around 2.5%.

This is below its estimated figure of about 3% it predicted in November.

Shares were down 0.5 pence at 636p on Wednesday morning.