Metadata about: Abstract Intensifying competition for air transportation passengers has led airports to research optimal designs and determine the infrastructure expansion capacities of their terminals. As a result, many researchers have studied this subject from a variety of perspectives. In this study, we propose an alternative methodology of determining the expansion of baggage carousel capacity over a series of steps that includes both a simulation and a cost-benefit analysis. The methodology consists of three stages. In the first stage, we forecast the volume of arriving passengers (excluding transfer passengers) and aircraft traffic with an autoregressive integrated moving average (ARIMA) model. Next, we conduct an elaborate analysis to estimate passenger delay using a discrete event simulation model in which we consider the conveyor load and the baggage carousel allocation to aircraft rates. Finally, we determine a plan to expand baggage carousel capacity that accounts for expansion costs and passenger benefits. Construction and conveyor costs were applied to expansion costs, and capacity expansion leads to passenger benefits due to reduced waiting time. Using a real case with 23 candidate baggage carousels at Incheon International Airport during 2013–2015, our experiments demonstrate the strength of the proposed methodology in planning appropriate capacity expansion that reflect the operational flow of passengers within the airport based on the future trend of passenger demand. In particular, our results show that carousel no. 18 should be expanded during the first quarter of 2013, carousels no. 17 and no. 19 should be expanded in 2014, and carousel no. 5 should be expanded in 2015 to obtain optimal benefit-cost ratios of 1.65, 1.79, and 1.76 for each year, respectively.

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