BAA has been hit by a loss after tax of £1.95bn which it said was in part due to a writedown of its investment property assets.

The airport operator said in its end of year results that the operating profit was affected by ‘largely non-cash exceptional costs’ including property writedowns and losses from derivative instruments of £346m compared with an increase of £29m in 2007.

Its investment property assets reduced in the year from £3.14bn to £2.7bn.

BAA said that its UK portfolio of seven airports had also suffered from reduced traffic due to 2.8% less passengers wanting to fly in the downturn, and increased fuel prices impacting aviation companies.

In December it was told by the Competition Commission that it might have to sell Gatwick, Stansted and Edinburgh airports to different purchasers.

BAA said that its sale process of Gatwick airport was progressing on schedule, with initial bids received last month.

It said that it expected the sale to complete by 30 June at which time it said the regulatory asset base of the airport should increase from £1.58bn at 31 December, to £1.62bn.

The commission’s final report is due in March, after which BAA will have two months to consider whether or not to lodge an appeal.