Leeds Bradford Airport (LBA) has scrapped its plans for a new £150m terminal building, blaming "excessive delays".
The airport has cited "excessive delays and the decision to call in plans by the Secretary of State for Levelling Up, Housing and Communities," as the reason for its decision.
It will instead turn its attention to developing the existing terminal "to enable it to meet the rapidly increasing passenger demand as the aviation sector recovers from the pandemic."
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Those plans were originally approved by Leeds City Council in 2019.
Airport bosses said they are not prepared to "commit a further uncapped sum over an indefinite time-frame into a public inquiry process."
LBA added its replacement terminal plans were "about meeting demand already approved under the 2019 consent in a more sustainable way" and would have allowed the airport to "achieve its environmental targets more quickly within an ambitious new development."
A spokesperson for LBA said: "LBA remains committed to delivering its 2030 Carbon Net Zero Roadmap and to creating a modern, decarbonised regional UK airport within the extension scheme."
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Vincent Holder, CEO of Leeds Bradford Airport, said: "It is with regret that we have made the decision to withdraw LBA's application for the development of a new replacement terminal.
"As the travel and aviation industry continues to recover from the impacts of the pandemic, LBA needs to be able to respond to rapidly increasing demand within the next few years.
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"I would like to thank everyone who has supported us in the planning process, from the general public to the business community and councils across Yorkshire. Whilst this is a setback for our airport and region, we remain committed to investing in LBA to be an outstanding, decarbonised, modern airport for the future.
"My team and I are optimistic about the recovery from the pandemic and about the future of Leeds Bradford Airport."
Leeds North West MP Alex Sobel welcomed the decision, saying: "I am pleased the airport is not proceeding with their application at public inquiry.
From the start this was always about increasing passenger numbers and carbon emissions, not getting a new building. I hope the airport will enter discussions about reducing aviation emissions now."
Further details of the airport's extension scheme will be released in the coming months.
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