The report, overseen by Transport for London deputy chairman Daniel Moylan, found rivals including Frankfurt, Madrid and Paris had pushed Heathrow to seventh in terms of destinations served by international airports worldwide, from second in 1990.
Business leaders pounced on the report to call for renewed consideration of expansion at the airport.
Chief executive of London Chamber of Commerce Colin Stanbridge said: “The capital cannot afford to wait for thirty to forty years for a new airport without real improvements in the medium to short term. London is already under economic threat because of the lack of runway capacity.
“A third runway at Heathrow would bring relatively swift economic benefits generating between £8.6bn and £12.8bn through increased productivity and around £20bn in wider benefits including new jobs.”
London mayor Boris Johnson backed the report, and called for a new airport to be constructed, urging a reconsideration of his idea for a new hub in the Thames estuary.