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London City Airport stops construction on its £170m terminal expansion

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London City Airport has decided to de-risk its infrastructure investment and put its terminal expansion on hold.

The Evening Standard is reporting that construction will not continue even though the foundations have, literally, been laid for the £170 million project.

In a statement, the airport said:

“While over the summer 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.

Furthermore, it has become clearer that the recovery to previous levels will take longer than initially expected.”

London City Airport stops work on half-built £170m terminal extension

London City’s terminal expansion plans

The terminal was to be the final phase of the £500 million investment that was given the go-ahead in 2016. The plan was to quadruple the floor space of the terminal to 68,000 square meters to enable it to serve 6.5 million passengers from 2023. Last year 5.1 million passengers passed through the airport. You can read our full article about London City Airport’s planned expansion here.

Last month, City Airport CEO Robert Sinclair confirmed the planned terminal expansion would include the addition of at least two departure lounges. London City does not currently operate any lounges unless you count the Jet Centre in private jet terminal which we reviewed, here.

London City Airport stops work on half-built £170m terminal extension

Let’s be honest – this announcement doesn’t come as a surprise. The airport was operating at 10% capacity in July.

In my interview with Sinclair last month, he refused to commit to whether the airport would continue with its expansion plans. Now we have our answer.

London City Airport stops work on half-built £170m terminal extension

A lot of improvements have already happened

The good news for passengers is that much of the £500 million investment has already been commmitted.  By the end of the year, London City Airport will have completed the first phase of its expansion, including the addition of a new parallel taxiway and eight new aircraft gates.

Both will allow the airport to increase its capacity, although that will be difficult to do without the additional 51,000 square meters of floorspace the new terminal would have delivered. (For reference, the current terminal is a meagre 17,000 square meters.)

The airport is keen to stress that it hasn’t shelved the plans completely and is likely to return to them when passenger flying recovers. In a statement to the Standard, Sinclair said:

“The airport and our shareholders remain very confident about the long-term prospects of London City and the vital role we can play in reconnecting London and the British economy as we recover from the shock of Covid-19.”

Comments (45)

  • Jay says:

    So sensible. Government need to do the same with HS2.

    • J says:

      Other European countries have been benefiting for literally decades from a vast network of high speed rail. As in so many other areas the UK looks increasingly backward. Cancelling it would be a terrible mistake.

      • Andrew says:

        Other countries are far bigger. Paris to Nice for example takes around 6 hours with the TGV. London to Edinburgh can be done in 4:30 hr even with our ‘slow’ trains.

        The real benefit of HS2 is in freeing up capacity on the existing commuter routes but there are probably cheaper ways that could have been done.

        • RussellH says:

          No, no cheaper way of doing it. New build is much cheaper, quicker, and simpler than trying to expand existing infrastructure that is in use while you are trying to work around that.

        • ChrisC says:

          “but there are probably cheaper ways that could have been done.”

          They looked at all the possible options and that included widening the right of way to add extra tracks to the side (often not geographically possible or if it is would require massive building works anyway) or to build a viaduct over the existing lines and put tracks on that but that would cause even more disruption with extended line closures at night and weekends and every bank holiday for who knows how many years.

          The signaling is already the best it can be on the line and it would only be possible to add extra trains by reducing the clearance between trains which would mean reduced speeds which would increase journey times.

          So what ways would you suggest?

          • Paul Pogba says:

            There is still capacity potential on the chiltern line (it’s not even electrified) and in any case the Teams meeting revolution means we may never need extra capacity.

    • Spursdebs says:

      If only, there’s loads of HS2 work going on in Bucks.

    • Rhys says:

      Won’t happen – the government is using giant infrastructure projects to try and stimulate the economy.

    • John says:

      The same? Well if the government does it they will spend millions on a study to see if it makes sense to pause the work. By the time the study is finished, it will conclude that the work was paused while the study was being undertaken and it is now time to start work again. Meanwhile contractors have been paid more millions to wait.

    • Andrew says:

      Definitely not.

      We saw the tragic consequences of relying on 150 year old earth banks, bridges and infrastructure to run a modern railway this week.

      It’s time to get a move on with HS2 and deliver a safe modern railway.

      • Chris says:

        Rail in Britain is already unbelievably safe, perhaps even too safe given the huge cost.

    • TGLoyalty says:

      Completely disagree. The cost keeps increasing because they spent years talking about it. Time to get it done.

      I think this plan to stop construction at LCY is short term thinking that will come back to bite them in the future.

    • NorksSaint says:

      The only shame with HS2 is that it doesn’t directly run through LHR – a huge missed opportunity to start to join up infrastructure like every other European country!
      Completely agree that we should just get on and build the thing and more like it, i suspect in 25 yrs we wont sit here and debate whether it was a good idea, we’ll know it was, much like the constant discussion around 3rd Runway at LHR and Terminal 5 back in the day.

      It really is time this country put itself on the front foot of things. If some people had their way we’d still be debating the Twyford cutting on the M3 and the Newbury by-pass for the A34.

      • ChrisC says:

        I belive it didn’t pass the cost benefit analysis test plus it would have added journey times to/from Euston.

        There will be lots of connections from HS2 and the GWR line to the south west and crossrail o Heathrow at Old Oak Common Station

      • Mikeact says:

        I remember the last two very well, the traffic lights at Twyford, and I wonder how many of the A34 protesters now drive through Newbury….none of them of course…idiots.

  • Dubious says:

    The new parallel taxiway and parking stands should help with aircraft efficiency too – less need to batch up three departures followed by three arrivals at a time which opens up more flexibility in the schedules.

  • William Wood says:

    Off topic-
    It seems that BA and possibly others are cancelling domestic flights from time to time which means that those relying on them to reach London for onward travel are in a risky position. Not only would they miss the onward flight but overseas hotel accommodation booked would be prejudiced. Any comment?

    • Andrew says:

      BA have always cancelled domestic flights from time to time.

      They are the first to be cancelled when there is weather problems or other capacity issues at Heathrow. They are usually pretty good at rerouting. Wouldn’t be the first time I’ve:-

      Been put in a fast black to Glasgow
      Made the dash to Waverley
      Rerouted via American
      Or even grabbed a £1 one way hire car and driven to Heathrow.

      Obviously there are fewer onward flights too at the moment.

      What’s your biggest risk and concern about “prejudiced bookings”?

      Hotels are a core part of the travel industry, you won’t be the first person who has called them to tell them you’re not going to arrive until the next morning.

    • Lady London says:

      Eu261 duty of care still applies so airline is responsible for hotels and rerouting

  • Froggitt says:

    Get back to it when traffic picks up, those foundations aren’t going anywhere……

  • mr_jetlag says:

    Makes sense – the funds being committed, means that the facility can be drawn on whenever traffic (and cashflow) return to reasonable levels.

    • Rob says:

      Except that, as the article states, we were already looking at 3 years until completion. Come 2023/4/5, the number of flights will be FAR above what it was in 2019 due to the new taxiway and parking gates but there will be no extra terminal capacity. There may even be less depending on how much of the existing place has to be shut to let the work get finished.

    • AJA says:

      It’s a shame they can’t do the construction work now while there are fewer passengers which would reduce disruption but I think it’s understandable to put it on hold. Let’s hope the economy and demand returns soon.

      • Lady London says:

        the only reason not to do it now seems to be they would have to pay interest on the funds as they are drawn at a time revenue is thin.

        If you believe in the City of London then they should be using this opportunity to get that expansion built now. Very shortsighted to suspend works now. I can only think their owners decided they are not willing to stand up to the short-term cashflow implications.

        • mr_jetlag says:

          Yes this was my interpretation as well. Line fees (unfunded) are typically 0.25% vs whatever the loan or bond interest would be. Rob’s point about traffic returning in the medium term is irrelevant if debt servicing kills the business…

    • Jordan D says:

      Shame because the expanded terminal (if memory serves) had to be completed before other infra improvements, like the car park, were to be completed. As others have said, shame they can’t do more now, when disruption will be less. I doubt they will be able to react quick enough when things do pick up.

  • Nick says:

    ‘68,000 square meters’… what, the airport is being constructed out of old electricity meters or something??

    Ohhh, maybe you mean ‘metres’?

    Literacy is important.

    • Rob says:

      Rhys has spent a lot of time in the US though 🙂

      You should have seen the changes I needed to make to Anika’s flight review this week to remove all references to diapers etc ….!

      • planeconcorde says:

        “stroller” wasn’t changed to “push chair” though. 😉

        • RussellH says:

          Which I had to think about for a few seconds too, even though I lived in the US for three years.
          I would guess that diaper is a word that the English are far more familiar with than stoller, proably because stroller means something else in English, wheras diaper is an imported word.

          • Andrew says:

            Nope

            Diaper is the original old English word, even Shakespeare used it.

            English evolved and moved down the route of nappy, whilst the US stuck with ye olde English and still use Diaper.

            My colleague, a native Frog, insists on speaking English on his regular academic vists to Montreal as according to him they “speak 19th century French”.

          • RussellH says:

            Ah, did not know that.
            So it fits with pitcher and gotten as archaisims here, but still standard American.
            [I once was appealed to in my teaching days by a pupil from London who had had his work marked down by my American colleague fior writing ‘had got’ instead of ‘had gotten’. It took me around five minutes to convince my colleague – and still friend, 40+ years later, that we had not said ‘gooten’ in the UK for a few hundred year.]

          • John says:

            Ye is a misspelling and mispronunciation of þe.

        • Peter North says:

          It’s called the Queens English for a reason.

          Whether your a queen or not!

          • Irons80 says:

            *You’re* not great at the Queen’s English judging by your standards of grammar, so I wouldn’t comment!

      • C says:

        And some of us who are [US] American but our long-term UK residents with UK baby vocabulary from the UK completely confuse everyone. Or I find they just think that we’re Canadian.

        • C says:

          Edited: And some of us who are [US] American but our long-term UK residents with UK baby vocabulary completely confuse everyone. Or I find they just think that we’re Canadian.

    • RussellH says:

      I have often wondered why we apparently adopted the French spelling metre rather than the gern Meter.
      Nevertheless it is a useful distinction to be able to make between the SI until of length and a measuring device.
      Just as it is useful to have both programme (TV, radio, etc.) and program (software).
      I am pleased that Rob did edit Anika’s article – I wish UK newspapers reporting on the upcoming US presidential election would edit the American “mail-in ballot” to “postal vote”

      • ChrisC says:

        It distinguishes between two types of vote so it’s correct.

        An absentee ballot (which is still a postal vote) has to be requested by an individual whereas a mail in ballot (yes which is also a postal vote) refers to when the state sends them out to all registered voters.

        Apparently in one persons mind (and that of some of his supporters) the first is absolutely fine but the second is the work of the devil!

  • Tony says:

    HS2 needs to be completed.
    My only gripe is why oh why did it not start at LHR?

    • RussellH says:

      Becaue the majority of the traffic will be people travelling to / from London, not LHR.

      AIUI, the original plans were for it to run via LHR, when they started to look at the additional cost (LHR is not on any sensible route to the north) and the extra journey time for the majority of the passengers who have no interest in LHR it made much more sense to have a decent, modern interchange at Old Oak Common where you will be able to pick up a train to LHR easily.

    • Bagoly says:

      Even better, start at Ashford International, and go via Gatwick and Heathrow on the way to Birmingham.
      Further north the plans do go to all of BHX, MAN, and EMA.

  • The Savage Squirrel says:

    Looks a massively short-sighted delay given that we’re building this for demand in 2023-2043, not today.

    Having said that, cashflow is king and if you’ve worked out you needthat liquid cash to pay bills right now, then there isn’t much choice.