The airport, which was taken over by Manchester Airports Group in February, had set out plans to build a second runway – and Boris Johnson had talked up the site’s prospects as a five-runway hub.
However, Sir Howard Davies said that Gatwick was a better option for expansion, as it nears the end of a council-imposed ban on new construction before 2019.
Davies said Stansted would cost too much to transform into a mega-hub, meaning airline fees would double, and the airport has less need to expand as it is currently using just 53 per cent of its landing slots.
“As the report points out, there’s still plenty of capacity to use up,” said Tim Hawkins, corporate affairs director at MAG. “Improving the rail links will be key for us next year… and our focus is that by 2030 we will be making the best of the capacity we’ve got.”
Chief exec Charlie Cornish said Stansted would reconsider its plan for an extra runway “at the right time”.
Ryanair, which is Stansted’s biggest airline, said it was disappointed by the news and called for “the dead-hand of political interference” to be removed from decisions on runways.
The budget carrier plans to increase its traffic at Stansted by 50 per cent to more than 20m by 2023.
Luton, which is 49 per cent full, was also denied a place on the list for a new runway. But London’s smaller airports are in line to get better road and rail links, after the chancellor pledged to upgrade surface access in his Autumn Statement this month.