Changi Airport Group (CAG) has confirmed it will close Singapore Changi Airport’s Budget Terminal on September 25th 2012.

The terminal will be demolished to make way for the construction of a larger passenger building so as to cater to the continued growth of air traffic at Changi Airport and further strengthen Singapore’s air hub status.

The new terminal, to be known as Terminal 4, will have a capacity of 16 million passengers per annum.

It will be designed to enable efficient passenger processing and quick turnaround of aircraft, and will not have aerobridges.

Unlike the present Budget Terminal, Terminal 4 will have a wide choice of retail and food and beverage offerings as well as passenger amenities that will better serve the needs of travellers.

To facilitate the construction of Terminal 4, airlines currently operating in the Budget Terminal will move their operations to Terminal 2 and will start operations there from on September 25th 2012.

The affected airlines are Berjaya Air, Cebu Pacific, Firefly, South East Asian Airlines and Tiger Airways.

The existing Budget Terminal handled more than 4.6 million passenger movements in 2011. Changi Airport, with a total capacity of more than 70 million passengers per annum, still has room to accommodate air traffic growth.

Over the past decade, passenger traffic at the airport has increased at a compounded annual growth rate of 5.2 per cent.

In 2011, Changi handled a total of 46.5 million passenger movements, a year-on-year increase of 10.7 per cent.

Construction of Terminal 4 will begin in 2013 and the new terminal is expected to be ready by 2017.