The Toronto Port Authority says Billy Bishop Toronto City Airport had another big year in 2012, generating $2 billion in economic output and welcoming 23 per cent more travellers over the previous year.

In total, a record 1.9 million people used the island airport located south of the downtown core, eclipsing the 1.5 million mark set in 2011.

"The double-digit increase in passenger numbers speaks to Billy Bishop's growing popularity with travellers," said port authority president and CEO Geoffrey Wilson in a statement. "These positive results coupled with exciting infrastructure investments made 2012 a year to remember."

In March of last year, Prime Minister Stephen Harper and Toronto Mayor Rob Ford kicked off the building of a $60-million pedestrian tunnel, funded entirely by the private sector.

The 240-metre underground project is slated for completion in mid-2014 and proponents say it will save time and ease traffic.

In comparison to Billy Bishop's staggering increase, preliminary results from Airports Council International show Toronto's Pearson International Airport recorded 35 million passengers in 2012 — roughly a 1 per cent increase over the previous year.

Porter Airlines and Air Canada both service the Toronto Island airport.