As the number of air passengers to the Faroe Islands continues to rise—currently at about 460,000 per annum—construction for a major expansion of Vagar Airport’s passenger terminal is expected to start in earnest by 2027. The current passenger terminal was built to handle up to 400,000 passengers annually, however growing air traffic has seen that number long surpassed. According to CEO Regin I. Jakobsen, more than 460,000 air passengers went through the gates of Vagar Airport during 2025, making the extension of the terminal a matter of growing urgency.
“Today’s terminal building is 3,000 – 4,000 square meters, and we will be aiming for approximately 14,000,” Mr. Jakobsen noted. “That is the amount of space required to accommodate for one million passengers a year, both ways, with the option to increase the capacity further to some degree if necessary. The existing terminal building that we have today is originally designed to be able to accommodate for 400,000 passengers a year. We have been above that for several years now already. We went past 460,000 last year [2025]; so the need is imminent to seriously extend the terminal.”
In the extension plan, a considerably larger terminal hall will be added to the existing one. Beyond improving existing functions, it will make room for various new services and facilities including, for example, flight bridges to allow passengers to board planes without having to step outdoors. As a separate project, a new aircraft hangar for Atlantic Airways will likewise be built.
A project contest was completed in late 2025 with a consortium led by Tórshavn-based engineering firm SMJ selected as winner by a unanimous jury. The pre-project including the preparation of an invitation to tender is well underway, Mr. Jakobsen added. “We expect to receive bids for construction in the spring of next year [2027] so that actual building work can start in the autumn of 2027.”
The estimated total cost is 700 million dkk (94M eur), according to Mr. Jakobsen, based on assessments made prior to the current pre-project phase.
Other current developments at the airport include a new luggage handling system, which has recently been fitted. Also preparations for a multistory parking lot have been made, with large scale earthwork already completed for the parking lot plus new connecting roads as well as groundwork for the new aircraft hangar. As for the main expansion project, financing is expected to be partly sourced from an investment fund under the Faroese Government.