ALPHA Airports claims the rapid development of the low-cost airline sector would help it absorb the worst of the impact of the terror attack in the US.

The in-flight caterer and airport retailer, which has operations at Newcastle and Teesside airports, has seen sales surge as no-frills airlines attract passengers to the UK's regional airports.

On-board sales of duty-free and trolley bar merchandise rose 16 per cent in the first half and Alpha's airport shops in the UK enjoyed a similar increase.

Chief executive Kevin Abbott said: "They have come to our heartland, the regional airport, and helped to drive growth in the business."

The group, based in Cranford, Middlesex, has already won a five-year deal to service Go flights and yesterday it announced a deal for Liverpool's John Lennon airport.

Alpha will provide duty and tax-free retailing, its World News newsagent and retail catering at the airport until 2006.

Mr Abbott said it was too early to predict the full consequences of the tragic events of a fortnight ago.

Alpha's Heathrow in-flight catering arm could be hit by a drop in demand from Air Canada and United Airlines, he said, but added that only 15 per cent of the group was exposed to transatlantic routes and that its airport shops had seen a rise in sales.

"The last two weeks have been very good for us. Longer check-in times have given people more time to check out the shops."

He said: "The Brits are a resilient lot and will still want their holidays in the sun."

Alpha is freezing its interim dividend at 1p as a precaution, but Mr Abbot said shareholders may receive a larger payout at the end of the year.

Group sales in the six months to July 31 rose four per cent to £221.1m. Pre-tax profits rose 22 per cent to £10.7m before one-off costs.