Airports operator BAA said it had shaken off the hangover caused by the

abolition of duty free, with a 5 per cent jump in profits.

The group, which has emerged from an "extremely challenging" 15-month period since duty free within the European Union was axed, said its last half-year figures showed a "return to growth".

The upbeat figures come exactly a year after the group saw its shares plunge when it warned the abolition of duty free had hit it harder than anticipated.

The company appears to have turned the situation around with pre-tax profits rising 5 per cent to £322 million.

Chief executive Mike Hodgkinson said: "These results clearly demonstrate a return to growth after an extremely-challenging 15 months post the abolition of intra-EU duty-free sales."

He said the group's airport retail business had recovered well from the ending of intra-EU duty-free, while, in respect of world duty free, it had nearly completed closing its loss-making inflight business.

The group, which operates Gatwick, Heathrow, Stansted, Southampton, Aberdeen, Edinburgh and Glasgow airports, is now concentrating on its core airports business.

It said it had seen strong passenger traffic growth through its UK airports - rising 6.6 per cent in six months.

Mr Hodgkinson said passenger growth had been "heavily helped by Stansted" though all the South East airports had seen good growth.

Stansted is the subject of a £200 million capacity project to allow it to continue to grow passenger numbers - which are increasing by more than 20 per cent a year.

Passenger numbers were also rising because of the strong pound and cheaper air fares, which encouraged people to travel abroad more often.