A hangover from the abolition of duty free within the European Union last year led to a four per cent dip in operating profits at airports operator BAA in its first quarter.

BAA said operating profits at its seven UK airports, which include Heathrow, Gatwick and Glasgow, fell to £147m in the first three months of its financial year, down from £153m a year earlier.

But the company added that duty free sales from outside the EU zone showed ''significant improvements'' in performance.

Chief executive Mike Hodgkinson said: ''While the special circumstances of the lead-up to the abolition of intra-EU duty free this time last year make both comparisons and forecasts very difficult, retail has performed ahead of plan in the quarter.''

BAA added that passenger numbers in the period grew by 7.5 per cent - with 32.1 million passengers travelling through its airports, up from 29.8 million a year earlier.

It expects total passenger numbers for the year to increase by 5.5 per cent.

The company said the increase in passengers numbers had enabled it to offset the impact of the duty free abolition and as such airport charges revenue grew by 9.5 per cent to £161 million, up from £147m.

Elsewhere, BAA said its Heathrow Express train service made £2.4m in the quarter compared with a loss of £1.4m in the first three months last year.

Pre-tax profit for the three months ending June 30 were £141m compared with £155m.