The North Section of Terminal 1B, which accounts for around one-third of Terminal 1's capacity, will be demolished in the first phase. According to AAHL, the remaining 91% of Mumbai Airport's passenger traffic will continue to operate normally.
Airlines operating from the affected section will have the option of temporarily shifting their operations to Navi Mumbai International Airport. AAHL said it would provide assistance to airlines to facilitate the transition.
Arun Bansal, CEO of Adani Airport Holdings, said the redevelopment of the ageing infrastructure could no longer be deferred on safety grounds.
April fire adds urgency to redevelopment
Terminal 1 has been identified as a safety concern for several years, with temporary mitigation measures being used while authorities and airport operators considered redevelopment options.
According to AAHL, the fire incident at Terminal 1 in April 2026 further highlighted the risks associated with continuing operations in the ageing facility. The availability of Navi Mumbai International Airport has now provided an alternative for airlines and passengers, allowing the redevelopment to proceed in phases.
Bansal said consultations with airlines on the future of Terminal 1 had been underway since 2020. The proposed redevelopment was also presented to the Airports Economic Regulatory Authority (AERA) and incorporated into the approved tariff framework.
T1 capacity to rise after redevelopment
The redevelopment is expected to increase Terminal 1's annual handling capacity by 33%, from 15 million passengers to 20 million passengers.
AAHL said the redeveloped terminal would restore all historical airline slots while also providing additional slots. The company said this would enable Mumbai Airport to accommodate higher traffic once the redevelopment is completed.
The phased approach is intended to avoid a complete shutdown of Terminal 1, which could have caused greater disruption to airlines and travellers.
Navi Mumbai offers incentives to airlines
Navi Mumbai International Airport is being positioned as a temporary alternative for airlines affected by the Mumbai Airport redevelopment. The airport is offering a 100% discount on landing fees for new international flights.
It also plans to provide cash vouchers to international passengers to offset the difference in user development fees between Navi Mumbai and Mumbai airports.
AAHL said the two airports would operate as complementary facilities, helping address the capacity constraints of the Mumbai metropolitan region while the redevelopment of Terminal 1 progresses.