U.K. Approves London City Airport’s $450 Million Expansion

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An aircraft takes off from London City Airport.

Photographer: Chris Ratcliffe/Bloomberg
  • New taxiway, parking to make space for new, larger aircraft
  • Move had been help up by previous London Mayor Boris Johnson

The U.K. government approved the expansion of London City Airport -- a project held up by former Mayor Boris Johnson -- as new Chancellor of the Exchequer Philip Hammond looks to underline the city’s role in the global economy in the aftermath of Britain’s vote to exit the European Union.

The 344 million-pound ($450 million) plan for the inner-city airport in London’s former docklands had been delayed by Johnson’s objection to the purchase of land needed for the expansion. Sadiq Khan, who took over as mayor after an election in May, gave approval to the project in his second week in office.

The airport will build new aircraft parking spaces, expand the existing terminal capacity and add a new aircraft taxiway, enabling more modern and larger aircraft to operate and adding to connections between the U.K. capital and mainland Europe.

“Making it easier to visit and do business in the City of London will help drive forward our economy and further strengthen the city’s status as the world’s leading financial center,” Hammond said in a statement. “London City Airport’s ambitious growth plans will boost international connections, strengthening the City of London’s links to destinations across the world.”

Heathrow or Gatwick?

The government announced its decision Wednesday even though Parliament has already broken until September for its summer recess. New Prime Minister Theresa May’s administration is due to decide after the recess whether to build an additional runway at either of London’s two main airports -- Heathrow or Gatwick.

Johnson, now foreign secretary in May’s government, opposes both options, having campaigned for a new hub airport in the Thames estuary, while Khan, from the opposition Labour Party, backs expanding Gatwick. May’s electoral district is under the Heathrow flight path.

Though City has increased its passenger tally by 50 percent in the past five years and is the closest terminal to the U.K. capital’s financial center, it’s a fraction of the size of Britain’s leading hubs and is limited in its growth prospects by its existing runway that can’t take full-size jets.

As part of Wednesday’s announcement, London City will spend 2.6 million pounds on new rolling stock for the Docklands Light Railway, which connects the business district to the airport in under 25 minutes, and improve access by bus and taxi.

The airport was sold by its former U.S. owners in February to a Canadian consortium of Alberta Investment Management Corp., Ontario Teachers’ Pension Plan and the Ontario Municipal Employees Retirement System. A bidding war led to a price tag of about 2 billion pounds, people familiar said at the time.

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