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Heathrow has said that passenger numbers and profits will fall this year because of the conflict in the Middle East.

Europe’s busiest airport said it expects a 1.1% decline in the total number of passengers to 83.6 million as the impact of the Iran war affects air travel.

In Heathrow’s latest investor report, it said: “The ongoing conflict in the Middle East is putting notable downward pressure on traffic. This reflects the risk that continued volatility in the Middle East could dampen traffic volumes, with impacts extending beyond the region to global travel demand over the remainder of the year.”

Heathrow said there had been a 0.7% increase in passenger numbers, to 32.8 million, in the year to the end of May, driven by factors including an increase in the number of passengers using the airport to connect to flights as other hubs were affected by the regional conflict.

Heathrow also said it expected profits to decline by £147m year on year, and £60m compared with its last forecast, published in December.

The company said it had been “engaging closely” with its regulator, the Civil Aviation Authority, to discuss the cost of its plan to build a third runway.

Earlier this month the Department for Transport released documents estimating that the economic boost from a Heathrow third runway could be a tiny fraction of previous estimates.

The government analysis shows that the runway would only boost GDP by up to 0.05% – 90% less than the 0.5% previously stated – while the overall trade-off from the bigger airport could set the UK back by as much as £62.5bn.

Analysis for the DfT also found that expanding London’s hub airport could have “major adverse” effects on the health and wellbeing of up to 3 million people living locally.

The construction and operation of the third runway will worsen not only noise and air quality but could also harm access to housing, education, healthcare, open space and transport, the report by the consultants Aecom said.

In May, Heathrow’s new chair opened talks with airlines and the billionaire local landowner Surinder Arora to attempt to defuse a row that threatens to further delay the project.