Key Points:

Rotorua Airport's runway looks almost certain to be extended by more than 630m, providing direct competition to Hamilton and Auckland for the lucrative Australian tourist market.

Resource consent approval for the $19 million upgrade was announced at the Rotorua District Council yesterday, although appeals could be lodged by any of the 423 submitters over the next few weeks.

The resource consent process is estimated to have cost the council $200,000 so far and any appeal would increase this figure by $100,000.

Mitigation works are estimated at $5 million, taking the overall project cost to at least $24 million.

Despite the costs, Rotorua's mayor, Kevin Winters, yesterday expressed confidence on behalf of his city.

"It's great news for our local economy. The potential benefit for Rotorua businesses and residents is simply huge. Rotorua is one of New Zealand's pre-eminent tourist destinations. But we have so much as yet untapped potential."

The airport proposal has however been dogged by controversy, with tangata whenua protesting about future land use restrictions, conservationists angry about the destruction of a wetland, and neighbours complaining about a lack of consultation.

Air New Zealand conditionally opposed the upgrade.

The airline submitted that an international airport at Rotorua was "not currently viewed as necessary, desirable, or appropriate".

It was concerned the cost of the upgrades would be recouped by way of increased landing fees, which would ultimately be passed on to customers.

Yesterday Air New Zealand corporate communications manager Tracey Palmer said there were no plans for international services from Rotorua.

However, Rotorua's Regional Airport Company remained confident that it would attract enough operators to make its venture commercially viable.

Chief executive George White said preliminary talks with airlines could now be taken to a more serious level after yesterday's news.

Rotorua would be the tourist gateway to the Bay of Plenty, he said.

Although Australian tourists would be targeted, so too would be tourists from further afield. "There might be a flight out of the UK that connects in Sydney."

Virgin, Jet Star, Air New Zealand, and Freedom were some of the airlines in the mix, Mr White said.

"We'll definitely be keeping all our options open, we have put our cards on the table, and we'll be contacting all airlines to see who is keen to do business with us."

The Rotorua District Council is 100 per cent owner of Rotorua Regional Airport Company, which is undertaking the capital works.

The runway is now 1612m long. The 365m southern extension and 122m starter area will combine with the 20m northern extension and 130m starter area to take the total tarmac length to 2249m. Council engineer Nico Claassen said the airport extensions and strengthening work would take two years. The project would be self-funding, and would not be a drain on local ratepayers, he said.

Mr White, who met his Hamilton counterpart Chris Doak this week, rejected the notion that his airport would be a serious threat to Auckland and Hamilton.

Rather than cannibalising existing tourist business, his venture would be "touching a whole new market".

Hamilton Airport chief executive officer Chris Doak would offer no comment on the potential threat to his company's business.

But yesterday's announcement is understood to have taken Rotorua's Waikato neighbours by surprise, with one source saying it would cause a "shake up" among Waikato councillors and airport managers.

Five territorial authorities throughout the Waikato have a stake in Hamilton airport, the main shareholder being the Hamilton City Council.

Hamilton Airport hosts a Freedom Air service, amid a backdrop of a ballooning terminal upgrade, now $4 million over budget at $15.5 million.

It has an option to extend the runway from 1900m to 2500m and develop an industrial park.