Gatwick Airport narrowed its losses as it was boosted by new routes to Asian markets and increased shortfall trips to Europe .
The UK's second biggest airport reported a pre-tax loss of £48.6m in the year to the end of March, down from £62.5m.
The airport saw a total of 33.8m passengers come through its doors, an increase of 2.2m, or 6.9%.
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However, the company, Gatwick Funding Ltd, said the figures were skewed as a result of the estimated 1.2m passengers who did not travel in 2010 due to volcanic activity, heavy snow and industrial action.
Taking these factors into consideration it said underlying traffic growth was estimated at 3%.
"We have been competing with Heathrow, Stansted and Luton and other European airports, and this has seen us achieve passenger growth every single month over the course of the year," said Chief Executive Stewart Wingate.
The company said low cost carriers in Gatwick's largest market, European scheduled, made the most significant contribution towards the year-on-year increase.
Political unrest in North Africa had been one of the most significant factors in a decline in other long haul traffic as charter airlines reduced capacity to the region, it added.
Gatwick is owned by private equity firm Global Infrastructure Partners, after Britain's Competition Commission forced BAA to sell the airport in 2009.
The firm said it planned to invest £435m over the next two years to upgrade passenger facilities.
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