London's Heathrow airport suffered a drop in Chinese traffic last month and is losing ground to European competitors owing to a lack of capacity, Spanish-owned operator BAA revealed on Monday.

"Heathrow's China traffic in January, including Hong Kong, was down by 0.7 percent versus the previous year," BAA said in an official statement.

"Through 2011 as a whole, Heathrow's China traffic was up 3.0 percent versus 2010. This growth rate was well short of the growth rates generated by other European hubs, with Paris and Frankfurt growing at 9.0 percent versus 2010 and Amsterdam growing at 6.0 percent."

The group, owned by Spanish transport infrastructure giant Ferrovial, added that Heathrow was suffering from a lack of spare capacity.

However, the key London hub handled a record 5.2 million passengers last month, which was 2.3 percent higher than in January 2011.

"BAA airports have demonstrated resilience in the current weak economic environment. However, Heathrow's capacity crunch is harming UK growth," said BAA Chief executive Colin Matthews in the statement.

"Business leaders in the world's fastest growing economies say they are put off investing in the UK because of a lack of direct flights.

"Heathrow's China traffic declined this month, which is in marked contrast to the 9.0-percent annual growth rates experienced by our European competitor hubs.

"This provides clear evidence that capacity constraints are damaging the UK economy today when the country can least afford it."