AIRLINE group bmi british midland claims the events of September 11 cost it £35m in lost revenue last year, as passenger numbers fell more than five per cent.

Last year, 6.7 million passengers flew with the airline, 400,000 fewer than in the previous year, which bmi said was a "direct consequence of the tragic events in September".

It estimated that £35m revenue was lost as a result, primarily due to a significant drop in transfer passengers through London's Heathrow airport.

The privately-owned group, which has operations at Teesside Airport, also said trading continued to be "extremely challenging" and it did not expect a recovery until next year.

Bmi, which was rebranded from British Midland last year, said it made an operating loss of £12m last year.

Figures were hit partly by write-offs and depreciation of business systems and equipment, costs of launching into the transatlantic market, and the costs of 700 redundancies last year.

However, an exceptional gain on sale of its baggage handling business meant pre-tax profits were £12.4m. Revenues rose 2.4 per cent to £756.9m.

Chairman Sir Michael Bishop, who owns 60 per cent of the group, said: "2001 was a defining year in the aviation industry and one of marked contrasts for bmi."