Foreign airlines account for 72 per cent of all international seat capacity into Victoria, and Melbourne Airport noted major carriers understand the current constraints and the need for expansion.

Melbourne Airport is working to finalise the details of a major international terminal expansion, following 12 months of engagement with airlines to deliver increased terminal capacity and an enhanced experience for passengers.

Lorie Argus, CEO of Melbourne Airport, said the plans were being developed in response to increasing passenger demand, with the existing international terminal often requiring bussing during peak periods.

“We’re setting new records for international passenger numbers and as Melbourne’s population grows, it’s important that our infrastructure grows too.

During peak periods we are already experiencing regular congestion in the international arrivals area, so it’s obvious to us that our passengers and airlines need more space.”

It follows the busiest month on record for international travel at Melbourne Airport, with 1,147,533 international passengers using the airport in December.

International seat capacity into Australia’s largest 24-hour airport hit 113 percent of pre- pandemic levels during December, which the airport said is putting pressure on existing facilities.

The completion of Melbourne Airport’s new elevated road network in 2026 will allow for an expansion of the international check-in and baggage claim halls, while discussions continue on an expanded international satellite that would increase capacity for airline lounges, retail outlets and passenger waiting areas, and up to five new widebody gates.

Melbourne Airport is currently midway through a AUS$500 million project to replace the international baggage system with a new tote-based system, which will increase capacity by allowing for any-time check-in and early bag storage.

In December, the airport set new records for the number of bags it handled for outbound flights.

Argus added: “We’re listening to our customers and working with our key international carriers to understand how we can deliver the best value for them and the best experience for our travellers.

The upgrade of our baggage system is the first step of an ambitious expansion of our international terminal.

More gates, more aircraft parking stands, more check-in space, and a larger baggage reclaim hall, combined with construction of Melbourne Airport’s third runway, would allow airlines to add more flights during peak times, which would give consumers and Victorian exporters more choice.

We hope to have plans formalised by the middle of this year, so that we can start work as soon as the enabling infrastructure projects are completed.”

The last expansion of the international terminal was completed in 2011, with the addition of five new gates and 41,000 square metres of extra space.

DNATA retail expansion

In related news, dnata Catering & Retail has embarked on a major expansion of its advanced facility at Melbourne Airport (MEL), further strengthening its position as Australia’s leading inflight caterer.

Representing an AUS$ 50 million investment, this development will enhance dnata’s ability to meet the evolving needs of its growing customer base with innovative catering and retail solutions.

The project will add 5,700sq m to dnata’s existing facility, increasing its total footprint to over 16,000sq m.

This will make it the largest airline catering centre in Victoria, with the capacity to produce 25 million meals annually.

Construction is already underway, with the newly built area scheduled to become operational in September 2026.

Hiranjan Aloysius, dnata Catering & Retail’s Regional CEO for Asia Pacific, said: “This significant expansion of our Melbourne facility is an important step in our ongoing growth journey, enabling us to meet the rapidly increasing demand for our quality services.

It will also contribute to our efforts to support the local economy and communities by creating new jobs and stimulating growth in associated sectors. We will continue to invest in our highly trained team, infrastructure and equipment to deliver outstanding meals and retail offerings that passengers love.”

Dnata currently serves 20 airline customers with a team of 1,000 employees in Melbourne, on over 60,000 flights annually.

Jai McDermott, Melbourne Airport Chief of Ground Transport, Property and Retail, added: “This development is a significant milestone in the long-standing partnership between dnata and Melbourne Airport. This project, and its interface with airside operations, will streamline dnata’s ways of working here at Melbourne Airport, and will ensure that as Melbourne Airport grows so too will dnata.

“This project will lay the foundation for dnata to accommodate new customers and support the long-term growth of existing airlines, especially as Melbourne Airport embarks on its own expansion to construct a third runway.”

Dnata said its expansion in Melbourne reflects its commitment to consistently enhancing its footprint and offering in Australia.

The company’s planned AUS$ 80 million investment in infrastructure is expected to create over 300 direct jobs over the next three years, while also generating indirect employment through partnerships with local suppliers.

In 2024 alone, dnata has invested more than AUS$ 200 million in products sourced from local Australian suppliers.

READ MORE:  Lego Group launches space-themed activation at Melbourne Airport

READ MORE: Penfolds launches GTR exclusive range in Melbourne with Lotte Duty Free

READ MORE: Lotte Duty Free welcomes Jay Chou to Phantaci pop-up in downtown Sydney