Because of capacity constraints at the terminal and air traffic congestion due to the military and naval presence, a second airport at Mopa was proposed.

During the Annexation of Goa, in December 1961, the airport was bombarded by the Indian Air Force with parts of the infrastructure being destroyed.

Two civilian planes that were in the airport – a Lockheed Constellation from TAP (Transportes Aéreos Portugueses) and a Douglas DC-4 from TAIP – managed to escape with refugees, during the night, to Karachi.

[14] In April 1962, it was occupied by the Indian Navy's air wing when Major General K. P. Candeth, who had led the successful military operation into Goa, "handed over" the airport to the Indian Navy before relinquishing charge as its military governor to a Lieutenant Governor of the then Union Territory of Goa, Daman and Diu in June 1962.

Once two vital road bridges across the main waterways of Goa were built in the early 1980s, and Goa hosted the Commonwealth Heads of Government Meeting (CHOGM) in 1983, the charter flight business began to take off at Dabolim a few years later, pioneered by Condor Airlines of Germany.

This involved constructing a new international passenger terminal (after converting the existing one to domestic) and adding several more aircraft stands over an area of about 4 hectares (9.9 acres).

[20] It has been built specially to help relieve the growing pressure on Dabolim Airport and to connect the state of Goa and its adjoining regions with more international destinations to increase tourism.

[23][24][25][26] Dabolim's air traffic control is in the hands of the Indian Navy, which earns revenues from this service on account of aircraft movements.

It receives a part of the passenger service fee which is shared between it and the Central Industrial Security Force (CISF).

The AAI's prime source of earning is from non-traffic services like passenger facilitation, car park, entry tickets, stalls, restaurants, and shops at the main terminal building and advertising boards.

The project, which involved development of a 3,710 metre long parallel taxi track along with associated facilities, would be completed in three phases.

As part of the works taken up in 2018, a peripheral road was built and the local traffic would no longer affect flight movement.

The building design features aesthetic glass, large steel span structures, and frameless glazing.

Goa's total international tourists (roughly double the charter passengers) account for 5–10% of the national figure and 10–15% of the country's foreign exchange receipts from tourism.

In 1983, the Indian Navy began inducting the BAE Sea Harrier into service, basing training activities at Dabolim.

[54] INS Hansa is home to several squadrons of the Indian Navy, operating aircraft such as Mikoyan MiG-29Ks, Kamov Ka-28s, Ilyushin Il-38s, Dornier 228s.

Some exceptions have been made on rare occasions by the naval ATC, chiefly in the case of foreign airlines.

Charter airlines carrying international tourists during the season tend to use the freer civil aviation regimes on weekends (Saturday and Sunday) and in the early morning hours.

The blocked time is about 15% of the total on a weekly basis albeit during peak morning hours for civilian flights.

However, the Indian Navy's top officers in Goa have hinted that the investment at Dabolim naval air station is ₹7.5 billion (US$87 million) and that it would be impossible to replicate this at Karwar.

[55] In early 2007, there were reports of a concerted move by the Navy, the AAI, and the state of Karnataka to extend the runway planned at the naval base at Karwar to 2,500 metres (8,200 ft) to accommodate Airbus A320s and to acquire 75 extra hectares for this purpose.

GoAir, Vistara, and other airlines use AAI's facilities, including machines, to process cargo during non-peak hours.

All these plans have implications for the proposed Mopa Airport and its link to Dabolim and Goa's population centres.