London City Airport has announced plans for a £344 million expansion which it says will add £1.5 billion into the UK economy every year.
City Airport Development Programme (CADP), which is a fully funded by the private sector, will see the airport's passenger terminal extended, the construction of a parallel taxiway and seven new aircraft stands.
The airport, which was sold to a Canadian-led consortium in February for £2bn, said the expansion will allow it to serve 6.5 million passengers by 2025. Last year, it welcomed 4.8 million passengers - the highest it had ever recorded.
The construction phase will create an estimated 500 jobs, with a further 1,600 coming once the expansion is completed. It is estimated the airport will be able to add an extra 32,000 flights a year to its schedule.
While increasing capacity, the plans will also see London City Airport capable of housing the next generation of greener, quieter aircraft.
Confirming the government's approval of the plans, Chancellor Philip Hammond said: "London City Airport’s ambitious growth plans will boost international connections, strengthening the City of London’s links to destinations across the world, and send a clear signal that Britain is open for business. 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 centre.
"This is a real vote of confidence in the resilience of our economy, creating over a thousand new jobs."
Declan Collier, London City Airport CEO, said: "Today, the new Government has shown it is ready to act in the best interests of the British economy. Expansion at London City Airport will create more than 2,000 new jobs in East London, add much-needed aviation capacity in the South East.
"As the airport serving by far the highest proportion of business travellers in the UK (52%), who do some £11bn of trade in Europe annually, today the Government has sent a strong message that London and the UK are very much open for business. I welcome the decision and look forward to delivering new airport capacity for the South East by 2019.”
The announcement comes at a time when MPs and business leaders are urging the government to make an "urgent and immediate" decision on plans to increase air capacity in the south east of England with a new runway at either Heathrow or Gatwick. The decision had already been delayed until this summer, but it was further pushed back until at least October following the vote to the EU referendum.