The owner of Heathrow slashed losses by more than £200 million last year on the back of record passenger numbers using the London hub.

The airport operator announced a pre-tax loss of £32.8 million for 2012 against a loss of £225.8 million the previous year. Revenue was up by 8.1% to 2.4 billion.

The company was boosted by the London Olympics and improved passenger satisfaction levels.

Passengers using Heathrow rose to 70 million from 69.4 million in 2011 but the numbers using Stansted – which has since been sold to Manchester Airports Group for £1.5 billion – dropped by 500,000 to 17.5 million

The sale of Stansted is expected to completed by the end of the month.

The group said it will make submissions to the independent Airports Commission headed by Sir Howard Davies into UK airport capacity during the year.

“The main development in UK aviation policy in the last year related to the debate on hub airport capacity, the importance of which is underlined by the fact that in 2012 Heathrow, the UK’s only hub airport, once again operated close to its maximum permitted annual flight numbers,” the company said.

“The hub airport model used by Heathrow and its competitors uses transfer passengers to support flights to long-haul destinations which would not be viable using local demand alone.

“But unlike its rivals in France, Germany, the Netherlands and Dubai, Heathrow is full and its capacity constraints prevent any meaningful increase in the numbers of flights and routes.

“This means the country’s ability to trade with emerging economies is constrained, with potential long-term consequences for UK trade, jobs and economic growth.

“At the start of 2012, whilst the importance of hub airport capacity was beginning to be accepted by the UK government, a third runway at Heathrow was being excluded as a potential solution.

“However, during the year the government established the independent Airports Commission, chaired by Sir Howard Davies, which has been tasked with identifying and recommending the options for maintaining the UK’s status as an international aviation hub.

“It is expected to do this by assessing the UK’s international connectivity needs and recommending the optimum approach for meeting these.”

The Commission is expected to produce an interim report by the end of 2013 which will set out its assessment of the evidence on the nature, scale and timing of the steps needed to maintain the UK’s global hub status.

A final report is expected by summer 2015 which will set out the commission’s assessment of the options and the economic, social and environmental impact and a recommended solution.

Heathrow chief executive Colin Matthews said: “2012 was an historic year for Heathrow. We gave a warm welcome and a smooth journey to thousands of Olympic and Paralympic athletes, and greeted a record 70 million passengers over the 12 months.

“We also achieved record customer satisfaction levels, with three quarters of people saying they had a ‘very good’ or ‘excellent’ experience at Heathrow.

“Our capital investment programme continued, with over £1 billion spent on improving the airport, mainly on the new Terminal 2 which opens next year.

“We also completed our refinancing programme, successfully issuing another £3 billion of bonds to put us on a stable, long-term financial footing.”