BAA, Britain's largest airport operator, last night expressed confidence that Heathrow airport's Terminal 5 would be approved in a report due to be published later this year after Britain's longest running public inquiry.
Russell Wallis, BAA's finance director, said he did not think that the inspector, Roy Vandermeer, would reject the plan because "it is very difficult to see any viable alternatives".
He said that the implications for the British economy if the government gave "an absolute no" would be considerable.
If Heathrow's expansion was capped, Britain would lose passengers and business to mainland Europe.
Mr Wallis stressed that an investigation by the Civil Aviation Authority into BAA's role as an airports operator was unlikely to lead to a break-up of BAA.
The company operates seven airports - including Heathrow, Gatwick, Stansted, Southampton, Glasgow and Edinburgh - but it was not in the interests of shareholders and BAA would not support it.
BAA's interim results, published yesterday, show that retail sales at its airports are starting to recover from last year's duty free debacle.
It was badly mauled by investors when it was judged to have mishandled last summer's abolition of duty free sales, and issued a profit warning last September wiping 40% off its share price.
But net retail income in the three months to the end of September rose by 14% to £132m, and net income per passenger was some 7% higher at £3.53.
Mike Hodgkinson, BAA's chief executive, said: "These results clearly demonstrate a return to growth after an extremely challenging 15 months post the abolition of intra-EU duty free sales. "
Over the first half of the year, net retail income was up 1% on a six month period in 1999 that included three months of duty free sales. But average spending was down 6%.
Mr Hodgkinson said that there had been a 6.6% increase in traffic during the six monthperiod, and a £200m expansion at Stansted was well under way. Passenger numbers were continuing to grow at 20%.
During the period, 69.5m people travelled through the seven airports.
Mr Wallis pointed out that sales were still running at "one to one-and-a-half per cent below where we would like to be". There was no room for complacency, he said. The travelling public needed to be constantly reminded about the potential of duty free sales for countries outside the EU.
The biggest reduction in sales had been in perfume related products, which had been the biggest single revenue earner before the abolition of duty free.
Group interim profits rose 12% to £327m, and the interim dividend is being boosted by 7% to 6.1p.
