Coventry Airport's application for a new passenger terminal has been rejected by the Government.
The decision follows a lengthy public inquiry, which saw major criticism from Birmingham International Airport (BIA) and a number of conservation groups in the region.
The extra terminal would have catered for an additional two million passengers per year but BIA bosses had raised concerns over an airspace conflict with the Baginton airport. The application depended on a number of constraints and mitigation measures, but the Government has concluded that these were not sufficient.
Chris Orphanou, the airport’s managing director, said: "We are bitterly disappointed with this decision as an airport and because of the impact it will have on the region.
"In our view, this decision is extremely short-sighted and not in the best interests of the region.
"We have established strong working relationships with local businesses, Chambers of Commerce, local communities, tourist bodies and tour operators to promote Coventry and the economic development of the West Midlands."
Mr Orphanou added that the negative outcome was a "stumbling block" the airport intended to overcome.
"Our legal team will now be considering the full implications of the news," he said.
The joint venture which acquired the airport in January last year has already invested more than #5 million to improve its facilities.
Coun John Hammon, Portfolio Holder for Development for Warwick District Council, said: "I am very pleased that the Government has finally resolved the issue of the impact of Coventry Airport on the local area."
