Singapore Changi Airport's Budget Terminal will be torn down next year to make way for a new, bigger terminal that will be able to handle 16 million passengers annually.
Construction of the new terminal, to be known as Terminal 4, will begin in 2013 and is expected to be operational by 2017, said operator Changi Airport Group (CAG).
Flightglobal Pro understands that the terminal will have two levels - one for departures and another for arrivals - and will likely be able to accommodate widebody aircraft. The current terminal is a one-storey building and has 10 aircraft parking stands for narrowbodies.
"It will be designed to enable efficient passenger processing and [the] quick turnaround of aircraft, and will not have aerobridges," said CAG.
Terminal 4 will also be more upscale, hence the removal of the word budget from its name, and offer a wide range of medium to high-end retail and food outlets as well as amenities that will "better serve the needs of travellers".
The Budget Terminal will shut down on 25 September, and low-cost carriers (LCCs) based there - Singapore's Tiger Airways, Malaysia's Berjaya Air and Firefly, and the Philippines' Cebu Pacific and Seair, will begin their operations at Terminal 2 on the same day.
CAG has been in talks with the airlines since late last year and said that they will be working with them to ensure a smooth transition.
The Budget Terminal, which has a capacity of seven million, handled 4.6 million passengers last year.
Once completed, the four terminals will have a capacity to handle 80 million passengers annually. Last year, Changi handled a total of 46.5 million passengers, an increase of 10.7% from a year earlier.
Singapore-based carriers such as Singapore Airlines, SilkAir, Tiger Airways, Jetstar Asia and new long haul low-cost carrier Scoot have ordered new aircraft and foreign carriers have also expressed their interest to grow their air links with Singapore, said CAG.
"The new terminal will enable CAG to sustain the long-term growth of Changi Airport," it added.
Terminal 2, which has a capacity of 23 million passengers, had a throughput of 13 million last year. One reason CAG is demolishing the Budget Terminal now, is so as to do it while Terminal 2 still has room to accommodate the LCCs.
Between 2005 and 2011, the market share of LCCs at Changi Airport rose from 5.6% of total passenger traffic to 25.6%.
The Budget Terminal, first built in 2006, underwent an expansion barely two years later to double its capacity.
CAG is also splitting four of its aircraft bays at Terminal 2 to boost handling capacity.