The need for expansion is underscored by congestion in the international arrivals area during peak times, which has led to the necessity of bussing passengers.

This expansion includes a significant upgrade to the baggage system, which is just the initial phase of a larger terminal enhancement that will add more gates, aircraft parking, check-in space, and a bigger baggage reclaim area.

CEO Lorie Argus has estimated the total cost of the expansion at approximately $4.5 billion and confirmed that discussions are ongoing with major airlines such as Qantas and Virgin Australia.

As part of the capital plan agreed upon with airlines, international passenger charges are currently $26 and are expected to rise to $34 next year.

During the record-breaking month of December, international seat capacity at the airport reached 113% of pre-pandemic levels.

The last expansion of the international terminal occurred in 2011, which added five new gates and increased the terminal's space by 41,000 square meters.

Looking ahead, passenger numbers at the airport are projected to double to 83 million annually by 2046, highlighting the urgent need for infrastructure growth.

In addition to the terminal expansion, the airport is currently undertaking a $500 million project to upgrade its international baggage system, aimed at enhancing check-in and storage efficiency.

Furthermore, Melbourne Airport has a $3 billion development plan for a third runway, which was approved by the Albanese government in September 2024 and is expected to be completed by 2031.

Melbourne Airport is set to expand its international terminal to meet the growing passenger demand, having welcomed over 1.1 million inbound passengers in December 2024.