ABERDEEN Airport is set for a major overhaul following the largest single investment in its 40-year history.

First Minister Nicola Sturgeon visited the airport today to announce details of a £20 million revamp which will increase the size of the terminal building by 50 per cent.

Included within the investment is the creation of two new passenger lounges, an expanded baggage reclaim area, a new security search area, new immigration facilities and new retail and catering facilities within the main departures lounge.

The first phase of what will be a three year project will get underway in May 2016.

This will involve the construction of a two-storey extension to the south of the existing terminal building. At ground level, the extension will accommodate all facilities for international arriving passengers as well as domestic baggage reclaim. Two business lounges will be located on the upper level.

Carol Benzie, Managing Director of Aberdeen International Airport, said: “Not only does this investment represent the most significant upgrade to the airport since the current terminal first opened in 1977, it demonstrates our commitment to providing passengers with high quality facilities.

“We have long recognised the need to expand the terminal and we are doing so with the long term future of the airport in mind. It is one of the most important pieces of transport infrastructure in the North East of Scotland and it plays a crucial role in supporting the wider economy. Now more than ever, it is vital that we invest in our airport to help improve the region’s attractiveness as a key investment destination and that we provide passengers, airlines and the city with an airport they can all be proud of.”

Aberdeen International Airport is owned by AGS Airports Limited, a partnership between Heathrow Airport Holdings' major stakeholder, Ferrovial, and Macquarie Infrastructure and Real Assets (MIRA). It also owns Glasgow and Southampton airports.

First Minister Nicola Sturgeon said: “This investment by Aberdeen International Airport and its owners shows great ambition and confidence in the Airport's future in preparing for projected growth. By increasing capacity and improving the passenger experience, the Airport is making a clear statement of intent and the North East and Scotland will see the benefit.

“Aberdeen is a fantastic city with lots to offer and the airport is a crucial gateway to the North East. This expansion opens up the city to even more tourists and businesses, which will result in an economic boost for the city and the country as a whole.”

Aberdeen Airport is currently home to 20 airlines serving more than 40 destinations worldwide and experienced its second busiest year on record in 2015 with 3.5 million passengers travelling through the airport.

Passenger services will be boosted later this year when Icelandair launches a new, year-round service to Reykjavik in March, with Flybe also introducing a new summer service to Newquay and Thomson launching a service connection to Gran Canaria.

In addition to the one passenger terminal, the airport also has one offshore fixed-wing terminal and three helicopter terminals to serve the North Sea's oil and gas industry.

James Bream, Research and Policy Director at Aberdeen and Grampian Chamber of Commerce, said: "The investment is fantastic news for Aberdeen International Airport and its customers. The airport is our gateway to regional and international markets and the ambitious development plans are fitting for a globally significant city

"We have recently spoken about the need for long-term investment and planning to ensure a sustainable future for our region. We welcome this announcement as a vote of confidence in our long-term economic future"

Mark McDonald, MSP for Aberdeen Donside said: “This investment in Aberdeen Airport is another welcome boost to the local economy, following closely on the back of the City Region Deal.

“Aberdeen Airport is a major part of the North East economy, and it is great to see the owners of the airport showing such confidence in both the business itself, but also the wider region as they invest for a state of the art terminal, fit for the future.

“I am delighted to see this investment and believe that it gives further reason to be optimistic for the future of the airport and the local economy.”