AIRPORTS operator BAA said it was still too soon to predict the future for aviation, as it warned increased security following the September 11 attacks on the US would cost it about £10m this year.

BAA said passenger traffic through its airports was 12 per cent down in the first three weeks of this month.

Chief executive Mike Hodgkinson said: "Passenger traffic has initially fallen less sharply in percentage terms than it did in the Gulf War, but it is impossible to predict the length and profile of the dip."

However, Mr Hodgkinson was upbeat about the long- term future for the industry.

He said: "There seems no reason to believe that, once confidence is restored, air travel will not return to growth."

The comments came as BAA said pre-tax profits for the six months to September 30 - which were hit by both the foot-and-mouth outbreak and the terrorist attacks - increased by 2.1 per cent to £333m, stripping out joint ventures and one-off costs.

In the current financial year, it expects security costs and other charges, such as insurance - as a result of the September 11 events - to add up to about £10m.

Bottom-line pre-tax profits fell to £150m, from £328m, hit by a £190m charge on the sale of its World Duty Free Americas subsidiary - mainly down to writing off goodwill associated with the original acquisition. Turnover was £1.13bn, against £1.18bn last year.

BAA said it was looking to cut costs but there were no plans to axe the jobs of any of its 13,500 staff.

It is to continue investing in its airports, and was expecting investment this year to be about £550m, slightly above the previous year's £540m. The interim dividend to shareholders remained at 6.1p