THE troubled aviation industry was yesterday lifted by two sets of company results.

Ryanair, the world's third largest airline on market capitalisation, recorded a 59 per cent rise in profits last year.

The Dublin carrier's report to the City was complimented by news from airport operator BAA which announced a profit before tax and exceptional items of £524m for the year ending in March.

BAA, the UK's largest airport company, said its seven UK airports handled 127.7 million passengers in 2002/2003 - a 4.7 per cent increase.

But chief executive Mike Hodgkinson, who is handing over to Mike Clasper next week, said: "This continued to be a challenging year for the aviation industry."

Michael O'Leary, chief executive of Ryanair, said: "The market has suffered from high fuel prices, the war in Iraq, the impact of Sars and the continuing effect of the economic downturn in many European countries. Despite these difficult conditions, Ryanair's continued profitability stems from the fact that we have the lowest costs and the lowest air fares, which no other European airline can match.''

Ryanair made after-tax profits for the year of 239.4m euros - about £172m. Passenger traffic in 2002/2003 grew by 42 per cent to 15.7 million.