Sioux Falls Airport Expansion Gains Momentum with City Approval, Construction to Begin in August

The Sioux Falls Regional Airport is officially moving ahead with the first phase of a major terminal expansion that promises to bring more gates, more flights, and ultimately, a boost to regional travel and economic growth.'

On Tuesday, the City Council unanimously approved the Airport Authority’s request to borrow up to $30 million, a procedural step that allows the project to stay on track for construction to begin in August.

The initial phase, known as “the skinny plan,” will increase the number of gates from seven to at least eleven and carry an estimated cost of $68.7 million.

“People should start seeing stuff happen,” said Dan Letellier, the airport’s executive director. “When they look out the window, they'll see a lot of moving parts.”

The expansion is seen as a generational investment for the airport, which has been operating at near-capacity in recent years. Over 700,000 passengers are expected to pass through the airport next year, and travel is already up 8.5% through May.

Letellier emphasized that funding remains a challenge beyond the first phase. While $35 million in federal funding has been committed and $2.5 million has already come from the state, the full project — estimated at $106 million — will require additional support.

“We certainly have asked our congressional delegation to look at other ways that maybe the federal government can help kind of fill a gap here,” Letellier said.

The City Council’s backing sends a message of support, though it does not financially obligate the city. Still, leaders expressed confidence in the expansion’s value.

“I'm a hundred percent confident that we can help with some financing,” said Councilor Richard Thomason. “How that looks is the million-dollar question… But I also think it doesn't make sense for us to do funding if we're not gonna be getting help elsewhere because we need to make sure that we're looking at this as a team perspective.”

Councilor David Barranco echoed that view, saying:
“I was pleased the council approved airport bonding authority. But I haven’t given up hope that we’ll secure enhanced levels of state and federal support for the expansion.”

Airport leaders hope the additional gates will open up opportunities for more direct flights to destinations like New York, Houston, and Atlanta — and eventually, with Customs and Border Protection included in the full plan, international service.

Why the Expansion Matters

‍With more than 60% of South Dakota travelers flying through Sioux Falls, the airport is a vital transportation hub. As the metro area grows, additional flight options and airport amenities are crucial for economic competitiveness — particularly when attracting new businesses.

Project Phasing and Economic Impacts

‍The $68.7 million first phase focuses on increasing gate capacity, but later phases would include modern passenger services, a Customs facility, and new lounges and restrooms. City leaders view the expansion as a necessary step to match the region’s growing demand for both business and leisure travel.

Next Steps and Funding Outlook

‍While bonds and federal dollars help close part of the funding gap, airport officials and city leaders are lobbying the South Dakota Legislature for future support — especially after lawmakers declined to contribute last year. The project’s economic impact may be key to persuading legislators in the upcoming session.

Originally reported by Patrick Lalley in Siouxfalls.