London City Airport has paused its £500m development programme due to falling passenger numbers during the ongoing Covid-19 pandemic – and concerns about the pace of future recovery.

The airport has decided to temporarily pause its development plans, including completion of a terminal extension and a new east pier, at the end of this year upon completion of new aircraft stands, a full-length parallel taxiway and new passenger facilities.

By the end of 2020, the airport claims it will have completed a number of projects to deliver significant new airside infrastructure and capacity. This includes eight new aircraft stands capable of accommodating the new generation of cleaner, more sustainable aircraft such as the Airbus A220, and the Embraer E2-190, along with a full length parallel taxiway providing the ability to allow 45 aircraft movements per hour, when demand returns.

More immediately, at the start of September, a new immigration facility will be opened to passengers which will include 10 new E-gates, and construction of a new baggage facility with increased capacity and resilience will be operational next summer.

At the height of the Covid-19 crisis, the airport took the decision to suspend commercial flights, re-opening on 21 June. Since recommencing commercial flights, the airport has welcomed back four airlines, including its home-based carrier, BA City Flyer, and is now connecting to 15 domestic and European leisure and business destinations. Further airlines are set to return over the next several months, and frequencies to key business destinations are expected to increase over the autumn.

However, while there has been a return to flying, the recovery of the UK aviation market has been slower than expected with demand well below normal levels, including at London City, where the airport says passenger volumes will be well down on the record breaking 5.1 million passengers who used the airport last year. 

Furthermore, says the airport, it has become clearer that the recovery to previous levels will take longer than initially expected – forcing the airport to re-evaluate the timing of the next phases of the development programme, including the new terminal extension.

Robert Sinclair, CEO of London City Airport said: “Given our location in the heart of London, and the resilient nature of aviation, the airport and our shareholders remain very confident about the long-term prospects of London City and the vital role we can play in re-connecting London and the British economy as we recover from the shock of Covid-19.

“For the time being, we have taken the decision to focus our attention on delivering the vital additional airfield infrastructure which will provide our existing and prospective airline customers with the potential to bring new generation aircraft to this airport in greater numbers, which will be a crucial aspect of how we build a better, more sustainable airport.

“Completing the terminal extension and new east pier very much remains part of our future, and, with the foundations for both in place, we stand ready to take those projects forward when demand returns. 

“In the months ahead we will work with airlines and government to help restore confidence to the UK aviation market and we will continue to support our local authority and our communities as they plan for life beyond the crisis."