The Port of Seattle Commission has approved an expansion of the North Satellite terminal that will extend the building to the west, adding eight airplane gates to accomodate the ever-growing jet traffic plus a large new passenger lounge for Alaska’s premium passengers

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Port of Seattle commissioners Tuesday unanimously approved the finalized design for the expansion of Sea-Tac International Airport’s North Satellite terminal — used exclusively by Alaska Airlines — and added $7 million to the project budget, bringing the total capital cost to $550 million.

The project will both renovate the 40-year-old terminal and extend the building to the west, adding eight new airplane gates to accommodate the ever-growing jet traffic plus a large new passenger lounge for Alaska’s premium passengers.

The project will be funded by all the airlines that use the airport, not just Alaska, in proportion to each carrier’s share of passenger traffic.

Construction is to begin early next year on the terminal expansion to create the eight new gates, which are to open in the second quarter of 2019.

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The second phase of the project will renovate the existing part of the North Satellite terminal and is expected to be fully complete in spring 2021.

The existing North Terminal is “a tired space, (that) really needs an upgrade,” Port Commissioner John Creighton said in an interview. And the expansion is needed because passenger traffic at the airport is “just growing like gangbusters,” he said.

For the past two years, Sea-Tac was the fastest-growing large airport in the U.S. Last year, passenger traffic grew a record 13 percent. This year, it’s already up 10 percent, Creighton said.

“Unfortunately, things will get more difficult at the airport before they get better,” Creighton said.

At peak times, he said, the airport has to bus people out to planes that cannot come to the terminal because there aren’t enough gates.

“The quicker we can get this done, the better,” he said.

The airlines pay for the work, although the funding ultimately comes from passenger ticket prices.

Every domestic-flight ticket out of Sea-Tac has a $4.50 airport fee added, and international tickets include a further $7.40 fee that goes to the airport. In addition, the airlines may pass on their costs above what those fees bring in through higher ticket prices.

Besides the North Satellite work, several parallel airport projects with separate budgets have been rolled into the capital program totaling $636 million: $29 million in improvements to the main terminal, $20 million in baggage-system refurbishment, and upgrades on concourses C and D, which Alaska Airlines will continue to use.

That’s in addition to the airport’s two other major development projects: the $608 million new international-arrivals terminal to open in 2019; and the $320 million new high-speed baggage system under the terminal that will finish an initial phase in 2018 and be completed in 2023.

The extra $7 million for the North Satellite project approved Tuesday is earmarked to enlarge the Alaska Airlines lounge on the upper floor to 14,485 square feet — 45 percent bigger than originally proposed — and to add 3,000 square feet of retail space that can be leased to concessions.

Alaska Airlines itself will spend $37 million on the interior of the lounge, which, according to the architectural plans, will feature large windows looking out on the Olympics.

Alaska has a passenger lounge on Concourse D as well as a small, temporary lounge space in the North Terminal.

The North Satellite project was begun in 2012 as a $300 million renovation of the aging terminal. With the rapid growth of air traffic at Sea-Tac, in 2012 the Port Commission decided to make it an expansion and add the extra gates — swelling the cost.