Initial development

In 1927 the Territory of Hawaii legislature passed Act 257, authorizing the expenditure of $25,000 for the construction of a landing strip in Hilo. The site was known as Keaukaha, on land belonging to the Hawaiian Homes Commission. Inmates from a nearby prison camp cleared the area of brush and rocks. The new facility was dedicated on February 11, 1928, by Major Clarence M. Young, then Secretary of Aeronautics of the U.S. Department of Commerce.

Sixteen months after the dedication, scheduled inter-island service began on November 11, 1929, by Inter-Island Airways, the forerunner of Hawaiian Airlines. For $32, travelers could climb aboard an eight-passenger Sikorsky S-38 on thrice-weekly flights between Hilo and Honolulu. Five years later, in 1934, the company was awarded the right to carry air mail for the U.S. Postal Service.

Early expansion

Improvements to Hilo's airfield were minimal during its first decade. Between 1927 and 1937, just over $34,000 was spent in developing the site. Over the next five years, however, the Works Progress Administration spent $261,613 to upgrade the airport. An additional $314,000 was provided by the Civil Aeronautics Administration in 1941.

During martial law in the territory following the attack on Pearl Harbor, all airports in the Hawaiian Islands came under the control of the U.S. military. The Army Engineers continued to expand the airport. In addition to military facilities to support an Air Corp fighter squadron at Hilo, the Army expanded and improved runways, taxiways and aprons. On April 19, 1943, the Territorial Legislature renamed Hilo Airport "General Lyman Field", for General Albert Kualiʻi Brickwood Lyman (1885–1942), the first U.S. General of Hawaiian ancestry. He was one of three sons of Rufus Anderson Lyman to attend the United States Military Academy.

The end of the war did not immediately bring about a return to civilian control of General Lyman Field. Although ownership of the airport was returned to the territory in September 1946, the Air Force leased the facilities and retained operational control of its tower for over three years after Japan's surrender. Meanwhile, Trans-Pacific Airlines, later renamed Aloha Airlines, commenced inter-island flights on July 26, 1946. On April 8, 1952, the territory assumed full control, paving the way for another round of expansion.

A groundbreaking ceremony for a new terminal building was held on July 17, 1952. At the same time, new high intensity lights were installed on Runway 8–26. Plans included a new freight terminal, aprons, parking areas and roads. The airport's new passenger terminal was completed and dedicated on December 5, 1953, and its freight terminal in June 1954.

Overseas growth

During the late 1950s, Territorial leaders anticipated a boom in tourism, prompting plans for a second runway capable of accommodating large jet aircraft. The Hawaiʻi Aeronautics Commission recommended that General Lyman Field be expanded for overseas flights. In April 1958, the territory acquired 91.6 acres (37.1 ha) on the eastern edge of the airport for a longer runway to enable non-stop flights to the west coast of the United States. The first phase was completed by April 1963 and the 9,800 feet (3,000 m) runway was dedicated on March 6, 1965. Interisland jet service from Honolulu and Maui was introduced by Aloha Airlines and Hawaiian Airlines during the mid-1960s. According to their respective system timetables at the time, in 1966 Aloha was serving Hilo with British Aircraft Corporation BAC One-Eleven jets as well as with Fairchild F-27 and Vickers Viscount turboprops while Hawaiian was serving the airport with Douglas DC-9-10 jets and also with Convair 640 turboprops. In April 1967 the state finished new taxiways and aprons, finally allowing the airport to receive overseas flights. On October 1, 1967, United Airlines Douglas DC-8 jets and Pan American World Airways Boeing 707 jets initiated nonstop flights from San Francisco (SFO) and Los Angeles (LAX).

Work began on an interim overseas terminal at General Lyman Field in November 1968. With a price tag of $775,000, this facility was designed for the burgeoning number of overseas passengers until a new terminal complex could be built. It was dedicated on July 4, 1969. The following year, Governor John Burns appointed the Hilo Airport Advisory Committee to make recommendations on long-term development of the airport. They suggested relocating terminals from the western edge of Runway 3–21 to the south of the newly lengthened Runway 8-26. The new terminal was designed for the largest passenger airliner in service: the Boeing 747. The airlines, however, did not wait until the new terminal was built; on February 6, 1971, the first jumbo jet landed: a 747 operated by Braniff International Airways.

Groundbreaking for a new terminal was held in July 1974. Construction of the terminal was done in two phases. The first was completed in 1975 and work immediately commenced on phase two. On April 30, 1976, officials dedicated the new, much more modern facility.