At the time of the Independence of Pakistan, Walton Airport was the main airport serving the city of Lahore. When Pakistan International Airlines (PIA) acquired its first jet aircraft, the Boeing 720, Walton Airport could not handle such an aircraft. The Government of Pakistan chose to build a brand new airport on the site of a runway airbase consisting of three runways, which opened in 1962. The airport had a specifically built runway and apron to handle aircraft up to the Boeing 747. This enabled Lahore to become accessible by international flights. PIA initiated direct flights to both Dubai, and London via Karachi. Over the course of the next 25 years, the demand for air travel rose. The government had to build a bigger terminal to meet the growing needs of the region. In March 2003, a new terminal was inaugurated by President General Pervez Musharraf, originally commissioned by then ex-Prime Minister Nawaz Sharif. The airport was named Allama Iqbal International Airport named after the national poet of Pakistan and became the second largest airport in Pakistan after the Jinnah International Airport in Karachi. All flights were switched to the new airport and Walton Airport was passed onto the military, which the government later reclaimed from the military and developed into a Hajj terminal. In March 2006, PIA inaugurated nonstop service between Lahore and Toronto using Boeing 777-200LR aircraft. In 2008, the national flag carrier of the UAE, Etihad Airways, opened a dedicated aircraft line maintenance facility at the airport. The facility is used for day-to-day technical line maintenance on Etihad aircraft, including hydraulic structural and instrument checks. In October 2020, British Airways resumed its direct flight operations to and from Lahore after 44 years. However, flights were postponed 3 years later. In 2024, expansion work began at the airport aimed at reducing congestion during peak hours. The expansion included a new remote cage area and the extension of the terminal to accommodate 2 more aircraft. The expansion is expected to be completed by October 2026. In June 2025, PIA operated the first flight between Lahore and Europe since their ban in 2020, flying to Paris. The flights were however suspended later. In March 2026, PIA resumed flights between London and Lahore, which was last served by British Airways in 2023. The Pakistan Civil Aviation Authority (PCAA) has planned to expand the terminal building, increasing the number of gates from 7 to 22, along with a corresponding rise in remote bays. This expansion will boost the annual passenger capacity of Lahore Airport from 6 million to 20 million, which will be sufficient to accommodate passenger demand for the next 15 to 20 years. The new design of the Lahore Airport Expansion Project has inspiration from the national flower of Pakistan, Jasmine or locally known as "Chambeli". The airport will have four arms similar to four platters of jasmine flower. The original building has Mughal architectural features but the new airport will have a blend of Spanish and Mughal architecture. The existing terminal main building will not be demolished but will be expanded. The current parking area will be converted into arrival and departure lounges. The first phase, which included the construction of a three-story parking facility in place of the front square lawn, has been completed and is now fully operational. The second phase, which involves upgrading the main runway, is currently underway. The design of the airport was developed by GilBartolomé Architects from Spain, following a contract awarded to international Spanish Firm, TYSPA International, which firm also worked on expanding the Madrid and São Paulo Airports. A Chinese firm, the China Construction Third Engineering Bureau, has been awarded the contract, worth US$382 million (RMB 2.6 billion CNY), to carry out the construction work.