SEOUL (REUTERS) - South Korea's Incheon Airport has begun a US$4.6 billion (S$5.75 billion) expansion to increase its passenger handling capacity by 41 per cent by 2017 to better compete in an Asian race to become a regional hub.
Incheon joins rivals such as Singapore Changi Airport who are expanding to capitalise on increased traffic in Asia. Incheon is also looking to accommodate an influx of people arriving for the 2018 Winter Olympic Games in South Korea's Pyeongchang county.
Incheon, which ranks ninth in international passenger traffic and second in cargo, on Thursday held a groundbreaking ceremony for a second terminal capable of accommodating 18 million passengers a year, bringing total capacity to 62 million.
The expansion includes boosting annual cargo capacity to 5.8 million tonnes from 4.5 million.
The government-owned airport expects economic growth to push up Asia-Pacific air traffic by an annual average of 6 per cent in the coming years, compared with a world average of 4 per cent.
Nearby rival Hong Kong International Airport, which expects passenger numbers to rise from 56.5 million people in 2012 to 102 million by 2030, is studying a third runway and expanded terminal.
Singapore Changi Airport, South-east Asia's biggest international airport by passenger traffic, is doubling its annual capacity to around 130 million passengers by the mid-2020s.
Incheon Airport opened in 2001 as the main airport of Asia's fourth-biggest economy. It has seen annual passenger traffic grow by over 6 per cent on average, thanks in part to a rise in Chinese and Japanese visitors attracted by Korea's increasingly prevalent popular culture.