Atlantic City International Airport drew closer to establishing its international reach Tuesday when a three-judge panel rejected a legal challenge to its $25 million terminal expansion.

The South Jersey Transportation Authority can now proceed with construction, which should take about 18 months, SJTA spokeswoman Sharon Gordon said. The project will expand the baggage-claim area to include a federal inspection station, allowing customs service to process international passengers swiftly.

“That will give us the opportunity to fly direct to any international city,” rather than connecting through another domestic airport, Gordon said.

Gordon said two airlines are interested in starting international service at the airport, but she declined to identify them while talks continue. She said Caribbean destinations would probably be targeted first.

Spirit Airlines, the airport’s majority carrier, has announced no such plans, airline spokeswoman Misty Pinson said. The carrier made an initial public offering of stock Sept. 17 and has adhered to a legally imposed “quiet period” since then.

The future of AirTran in Atlantic City, which already flies to and from Atlanta each day, is unclear in the wake of Southwest Airlines’ plan to buy it.

Passenger traffic has grown at the airport this year, SJTA records shows. A record 688,000 passengers departed the airport in the first seven months of this year, 29 percent more than in 2009.

WestJet flew to and from Toronto from October 2009 until May, its passengers going through the customs process in a screened-off section of the baggage area. Although Toronto service has stopped, it helped motivate the push for a federal inspection station.

Philadelphia contractor Hunter Roberts Construction will build the terminal expansion, an opportunity the SJTA awarded April 20 before a challenge from competing bidder T.N. Ward Construction of Atlantic City stalled the project. The case went to the Superior Court of New Jersey’s Appellate Division.

Hunter Roberts bid $25,157,675, lowest of the 10 bids opened March 18. for the opportunity. T.N. Ward came in second at $25,847,000 but argued that Hunter Roberts had not followed bidding rules, including misrepresenting the qualifications and prescribed duties of its subcontractors. The panel disagreed.

The April 20 bid award was the project’s second. T.N. Ward was initially awarded the contract in November, but a rival bidder, Ernest Bock & Sons of Philadelphia, claimed the bid specifications were unclear. The SJTA changed its specifications and took new bids, which produced a new winner in Hunter Roberts.

“We’re in the process of scheduling our construction meeting. We’ll bring everybody in and develop the timeline,” Gordon said. “It’s just a shame because we lost such a beautiful summer — perfect weather for construction.”

The project is better late than never, said Assemblyman John Amodeo, R-Atlantic, who is trying with Assemblyman Vincent Polistina, R-Atlantic, to legislate a way to crack down on or expedite bid challenges like Ernest Bock’s and T.N. Ward’s.

“In a time of high unemployment and a lot of guys out of work, it would have been nice to have this job a year ago, but it still will help,” Amodeo said. “We need that.”

The terminal expansion will unfold as the $308 million NextGen Aviation Research and Technology Park takes shape at the William J. Hughes Technical Center over the next five years. NextGen is a federal project to shift air traffic surveillance from ground-based radar to satellite triangulation.

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Airport expansion

The Atlantic City International Airport’s terminal overhaul should take 18 months and cost $25 million.

The larger facility will include a customs area, accommodating direct international flights.

Two unidentified airlines are interested in starting international service at Atlantic City, airport spokeswoman Sharon Gordon said.