The management of the Invercargill Airport is planning to introduce a departure tax on travelers passing through the airport in order to fund a new terminal building, which would require an investment of $13.3 million.

Invercargill Airport chairman Joe O'Connell said that Holdco, which is the Invercargill City Council's holding company, will collection will allow the airport to fund the construction of the new terminal building for replacing the existing terminal building that is 50 years old and is facing several issues. The city council has also directed Holdco to invest $13m of capital for upgrading the airport facilities.

The new 2900sqm single-level terminal building will be constructed at the same site as the existing airport and would be about 300sqm bigger than the current structure. The construction work will be carried out in three stages over about 20 months and the work is expected to begin in March next year and finish in 2015.

Mr O'Connell said that the new building will use space in a more efficient manner and the baggage collection will be inside the main complex. The airport will continue to function during the construction work in order to void disruption to passenger services. The new terminal building will cater to demand for the next ten years and has been designed in a way that expansion would be possible at the site.