During the war years, the airport was a base for 264 Fighter Squadron. It was also an important manufacturing site at which the Percival Aircraft Company designed and built a series of aircraft for both civil and military use. Development of the civil use of the airport resumed after the war and in 1952 a new control tower was opened. The 1950's and 1960's saw the birth of affordable holidays which combined the transport and accommodation arrangements into a single 'package'. The 'package holiday' enabled many people to travel abroad for the first time and laid the foundations of the immensely successful inclusive tour holiday market.

London Luton Airport played an important role in the development of the inclusive tour holiday business in the UK. A key event in the growth of charter traffic at Luton took place in 1962 with the formation of a new charter airline called Euravia. At the end of 1964 Euravia changed its name to Britannia Airways. Now, Britannia is one of the world's largest charter airlines and is still based at the airport. In 1968, another charter operation, Monarch Airlines, was formed. Monarch also developed its business over the years and continues to have its base at Luton.

The growth of the inclusive tour market at london Luton Airport was such that in 1969 a survey revealed that a fifth of all holiday flights from the UK departed from Luton Airport. By 1972 Luton had become Britain's most profitable airport. Luton suffered a major setback in 1974 when a major tour operator, Clarksons and its airline Court Line, went into liquidation. This sent shockwaves throughout the travel industry but had a major impact on Luton where Court Line was a large airline operator.

A Government White Paper published in 1978 recognised Luton as an integral part of the London airports system. The airport's committee began to prepare to take London Luton Airport into the 1990s and on to five million passengers per annum. As part of the development, a new international terminal building was opened by HRH The Prince of Wales in 1985 which is still in use today. In 1986 Monarch Airlines started Monarch Crown Service scheduled flights to Spain and Irish airline Ryanair launched scheduled services from Luton to Ireland. This was the start of the growth of scheduled air services from London Luton Airport which have now become over 70 per cent of the business volume.

Another key event in 1986 was the Airports Act that required local authority owners of airports to establish their airports as companies with a Board to manage the business.