The Labour government has given a strong signal of its intention to back British business by allowing London City Airport to expand passenger capacity.
It was announced on Monday evening that the popular business travel hub had been given the green light to boost its annual passenger cap from 6.5m to 9m.
The decision was not an easy one. The airport, which is known for serving London’s cityfolk travelling from nearby Canary Wharf, had been embroiled in spat with its local council, Newham, throughout the last year.
It seemed in April last year the expansion would never get off the ground as Newham forced the hub to launch an appeal against a decision to block the proposals due to their environmental impact.
But in the run up to the decision Labour suggested it would be “open-minded” to the prospect of airport’s expanding, amid announcements from a slew of London hubs, including Gatwick, Stansted and Luton, intent on growing their sites.
The environmental impacts of more flights should not be understated. Such increases will dent the aviation sector’s ambitions of decarbonising by 2050 and must be matched with investments in renewable technologies and Britain’s rail sector.
The government has denied City Airport a request to lengthen flying hours on Saturdays as it attempts to balance the two priorities, yet the overarching sentiment is clear; the UK’s aviation sector is critical for maintaining economic growth.
In fact, City Airport’s expansion could prove particularly important for the recovery of corporate travel, which has lagged in the post-Covid era following an increase in home working and the use of platforms such as Zoom and Teams.
Leisure travel has boomed over the last two years but earlier in August, industry trade body the Global Business Travel Association, warned corporate travel had settled into a “new normal” as executives take fewer trips.
In an interview with City A.M. last year, its former chief executive Robert Sinclair cited growing competition from Dubai, Singapore and New York as key reasons London needed to get behind its City hub and keep pace on the world stage.
Overall, the airport estimates the expansion proposals will create around 2,200 job and contribute £702m in GVA to London’s economy. Its total economic contribution to the UK has been placed as high as £2bn each year, primarily made up of money spent by business tourists and leisure tourists in London.