Melbourne Airport Announces $4.5B International Terminal Expansion

Melbourne Airport has announced a privately funded $4.5 billion expansion of its international terminal to accommodate record passenger growth and enhance its role as a major 24-hour gateway for Australia. The project will significantly increase capacity at Terminal 2 (T2), the airport's international hub, with the addition of five new aircraft gates and expanded passenger processing areas.

The investment by owner-operator Australia Pacific Airports Corporation (APAC) comes as the airport experiences a strong resurgence in international travel. According to an official media release from Melbourne Airport, January 2026 set a new record for international travel with over 1.26 million passengers. This follows the airport's busiest month on record in December 2025, when it handled a total of 3,421,195 passengers. For the 2024 financial year, the airport served over 35.1 million passengers, with international traffic reaching 96% of pre-pandemic levels.

Project Scope and Capacity Boost

The core of the T2 expansion involves the construction of five new aircraft gates. These stands are designed with flexibility to accommodate either five widebody aircraft or up to eight narrowbody aircraft simultaneously. This increased capacity is critical for attracting new services and allowing existing airline partners to increase frequencies with new-generation aircraft. In addition to the new gates, the project includes a substantial expansion of the check-in hall, baggage claim facilities, and other passenger-facing areas within the terminal.

Melbourne Airport Chief Executive Officer Lorie Argus stated that the investment is essential for the region's future. “As Melbourne grows, demand for air travel is growing too and we are investing billions of dollars to deliver the infrastructure we need to accommodate that,” Argus said. “Increased capacity on our airfield and terminals will allow airlines to schedule more flights to more places, which will give consumers and exporters more choice.” The economic benefit is significant, with the airport CEO noting that a single average daily international flight is estimated to be worth $190 million annually to the Victorian economy.

Enabling Works and Project Timeline

The T2 expansion is enabled by another major infrastructure project, the new Terminals 1, 2, and 3 (T123) Transport Hub. The opening of this integrated ground transport center in September 2026 will free up the land currently occupied by the Terminal 2 arrivals road, making the terminal expansion physically possible. According to the airport's announcement, preliminary work on the international terminal project is scheduled to begin after September 2026.

This terminal-side development is designed to complement planned airside capacity enhancements. The project is aligned with the airport's plan for a new third runway, which is currently scheduled to open in 2031. The combination of expanded terminal facilities and increased runway capacity aims to future-proof the airport for decades of anticipated growth.

Government Collaboration and Industry Context

While the infrastructure investment is privately funded, Melbourne Airport is calling for federal government support to upgrade passenger processing technology to match the physical expansion. The airport is working with the Australian Border Force to streamline customs and immigration procedures, ensuring that passenger throughput can keep pace with the terminal's increased capacity.

Assistant Minister for Citizenship, Customs and Multicultural Affairs, Julian Hill, acknowledged the collaborative effort. “I welcome Melbourne Airport's work to streamline passenger movements across domestic and international terminals,” he stated. “Australian Border Force will continue working closely with industry partners to improve passenger experience and ensure Australia's airports are fit-for-purpose over the coming decades.” The project reflects a global trend of major airport infrastructure investment driven by the sustained recovery in post-pandemic passenger traffic, as detailed in the official Melbourne Airport Media Centre.

Why This Matters

This $4.5 billion investment solidifies Melbourne Airport's position as a key international hub in the Asia-Pacific region. For airlines, the expansion provides much-needed capacity to launch new routes and upgauge aircraft, fostering greater competition. For passengers, the project promises a more efficient and modern travel experience, though construction may cause short-term disruptions.

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