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.

During 2001, 6.7 million passengers flew with the airline, 400,000 less than 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 based 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 for 2001 it made an operating loss of £12m.

Figures were hit partly by write offs and depreciation of its business systems and equipment, costs of launching into the transatlantic market, and redundancy costs. The group cut 700 staff last year, or ten per cent of its workforce, partly as a response to September 11.

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

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