Sir Alex Ferguson admitted that he could have no complaints after Manchester United were knocked out of the Europa League by an outstanding Athletic Bilbao side who he hopes will go on to win the competition. The United manager was magnanimous in defeat as he reflected on a night when his side never looked comfortable against a Bilbao team who thoroughly deserve their place in the quarter-finals.

Leading 3-2 from the first leg at Old Trafford, Bilbao scored early on with Fernando Llorente's exquisite volley, after Rio Ferdinand was caught out of position, and doubled their advantage midway through the second half when Oscar de Marcos's shot deflected in off Chris Smalling. Although Wayne Rooney scored 10 minutes from time, the goal came completely against the run of play, with the 2-1 scoreline flattering a United side who have suffered early exits in two European competitions this season.

They failed to progress from the group stage of the Champions League after a humiliating defeat against Basel and the consolation prize of participation in the Europa League has also proved to be a shortlived affair. It has, all in all, been a sobering experience for Ferguson and the United players who have lost four of their 10 European matches this season, including two defeats to a Bilbao side who are seventh in La Liga.

"I don't think we can complain about the result. I think that in the second half in particular Bilbao were the better team," Ferguson said.

"The disappointment for me is losing such a soft goal. I thought the first half was even, I thought we did play well. It was a fantastic end-to-end game, there was nothing in it, really. But the goal was a bad one for us to lose. You can't believe an English side could lose a goal like that – long ball.

"The second half, in the first 15 minutes, they could have scored two or three goals. I thought they started the second half very well and had us on the back foot for most of that first 20 minutes. The goal [from Rooney] was too late really to do anything about it. If it had been a bit earlier we might have made something of it."

Ferguson was effusive in his praise of Bilbao and in particular their coach Marcelo Bielsa, who has put together a team who are not only playing free-flowing football but also have a wonderful work ethic. "I think that they could do very well [in the Europa League]," said Ferguson. "What we have seen tonight and last Thursday is a team whose work rate is higher than anyone I have seen in Europe, and that takes you a long way.

"Apart from the fantastic work rate, they have some good qualities also. It's not just their work rate getting them where they are at the moment – they're showing some very good combination football and I think they can go the whole way. I think there is a very good chance they could win it.

"I want to wish them well and I hope they do win it because it's testimony to the hard work they all put in, their coach right through [to the players]. I think they have created a cause and it's a wonderful thing to see such incredible energy and determination to win football matches, so I think they deserve to win it."

Asked whether United's travails in Europe this season should just be put down to "a bad year", Ferguson replied: "I hope it is [that]. I think that there is a root [cause] in terms of some of the goals we have lost in these tournaments, they have been pretty poor, so it's something we need to analyse. It has been a disappointing year."

United's sole focus will now be on retaining the Premier League title and Ferguson admitted that he had one eye on Sunday's match against Wolves at Molineux when he withdrew Ferdinand, Michael Carrick and Ryan Giggs during the second half here, with the game beyond his team at that point. "I don't think it's an issue for me feeling sorry for myself [after the Bilbao defeat]," the United manager said.

"I think the disappointment and analysing the performance is more important. We have an important game on Sunday and there will be some changes – that's why we took Ferdinand, Giggs and Carrick off eventually, with a view to Sunday's match."