by Thelma Etim BBC News Online, Southampton

The rise in passenger numbers is set to boost the local economy

But 12 months later, the record passenger numbers at the airport - the highest in its 94-year history - indicate the local economy is set for a major boost in the future.

Around 1.4m passengers used the airport between March 2003 and March 2004.

About 50% of those travellers flew with Flybe.

Hoteliers, restaurateurs and taxi-drivers are just some the people expected to benefit from the now "thriving" city airport.

Positive future

BBC South's transport correspondent, Paul Clifton, said: "Flybe has been astonishingly successful and that is set to continue.

"It has transformed Southampton Airport, which is now one of the fastest growing airports in the UK."

The budget airline operates 16 routes from Southampton, where eight other airlines and four major tour operators are also based.

There is plenty of evidence that a thriving city airport is a critical factor in the economic development of a region Southampton and Fareham Chamber of Commerce

Figures for March 2004 show more than 118,000 passengers travelled through the airport - an 86.9% rise compared to March last year.

Local business leaders are "very positive" about the knock-on effect a prosperous airport could have on the city in the future.

Catherine Wright, spokeswoman for Southampton and Fareham Chamber of Commerce, said: "It is too early to find tangible evidence of the impact the booming business the airport is doing is having on the local economy.

"However, there is plenty of evidence that a thriving city airport is a critical factor in the economic development of a region.

"It gives confidence to developers and investors."

Bob Musker, chairman of the Southampton Hoteliers' Association, believes "anything that improves transport links is beneficial to the city's economy".

He said: "The more routes that Flybe pick up the more opportunity there is for more people to come and stay in Southampton."

Low-cost carrier war

Earlier this week, Ryanair chief Michael O' Leary predicted that fierce competition between Europe's budget airlines would lead to some of them failing this winter.

Last February, low-cost airline Buzz abandoned expansion plans at Bournemouth Airport, after it was taken over by Ryanair.

The new routes would have doubled the capacity of the airport.

A spokesman from Flybe said: "Flybe does not share Michael O'Leary's concerns about the future for the low-cost air industry in the UK.

"Our industry has ignited a real passion for travel in the UK and that trend shows no signs of ending."

A Southampton Airport spokeswoman said: "We remain very confident in Flybe and in what it is doing."