Vietnam's defense ministry has freed up some more areas at Tan Son Nhat International Airport on Tuesday, which will enable the expansion of the country’s largest, yet overcrowded airport.
The airport authority will build runways and parking space on the 21 hectares (52 acres) land so far reserved for military cargo planes and helicopters.
Following the handover, two terminals, capable for handling a combined 20 million passengers a year, will be built by 2018, said Lai Xuan Thanh, head of the Civil Aviation Administration of Vietnam.
The entire project is estimated to cost around VND19.7 trillion ($864 million) and will allow the airport to handle 45 million passengers a year.
The Ho Chi Minh City's airport with two terminals has been serving 32 million passengers annually, well over its design capacity of 25 million.
It has only two runways, which have been several times reduced to one because of flooding or lightning strike. The airport has space for 57 aircraft at a time, but sometimes it has to handle more than 70 planes.
Thanh said the airport has been constantly overloaded, forcing planes to delay or circle in the air, leading to heavy economic losses and threatening air safety.
The defense ministry handed nearly eight hectares of its land for expanding Tan Son Nhat airport three years ago.
Vietnam’s airline market has the third fastest growing pace in Asia-Pacific and the country is grappling with an acute dearth of airport capacity.
Aviation authorities estimated that the number of passengers on domestic flights would soar 35 percent to 28 million this year, accounting for more than half of the total air travel in the country.
National flag carrier Vietnam Airlines, low cost carriers Jetstar Pacific and VietJet Air plus the newly founded Vietstar Airlines are planning fleet expansion to have a total of 263 aircraft in the next four years. Vietstar has not been licensed for air transport.
The country is working on a design for a massive airport in Dong Nai province to reduce pressure at Tan Son Nhat airport, but construction is not expected to be completed by 2025.