British Airport's operator BAA yesterday said it was bracing itself for an extra £25 million sterling (€39 million) cost burden from the abolition of duty free sales inside the European Union.

The upwards revision to its forecasts will take the total cost of the new regime to £60 million this year, although the company said sales were starting to pick up again.

BAA had already warned last month that losses on duty free were worse than expected.

Pre-tax profits in the six months to September 30th came in at £163 million against £307 million at the same stage last year.

Turnover was £1.15 billion against £1.03 billion before.