Rotorua Airport's $4.9 million revamp could be under way in the coming months - but it will have to take on more debt to do it.

Business leaders spoken to by the Rotorua Daily Post say the work is long overdue because if the airport is not brought up to standard it could tarnish the city's tourism reputation.

The news comes as figures show airport parking revenue is on the increase and passenger numbers have climbed.

Rotorua Airport chief executive Mark Gibb said it had set aside $1.4m in cash reserves and would use an existing $3.5m debt facility for the two-prong project, which included upgrading the fire station and terminal.


Yesterday it lodged consent for the fire station which would go to tender immediately, while the back-end of the design around the terminal was slightly more complex and was expected to ''follow on its heels''.

Mr Gibb said after two years of commentary the intent was to deliver the project with hopes of getting the 12-month development under way by Christmas.

''I'd hate to see Rotorua known for having the oldest and most dilapidated airport in the country. We don't want to be thought of like that, as in a lot of ways the airport articulates where you are in terms of tourism and growth.

''We need to make sure we reposition it accordingly.''

Plans for the airport include a new business lounge, a rebuild of the arrivals area and a refurbishment of departures.

There were key issues with public safety and operational compatibility with the fire station and terminal which were not fit for purpose, he said.

At the moment the airport had a $15m debt owed to Rotorua Lakes Council, down from $18.6m.

''Once the works are complete we will remain focused on debt repayment and strengthening our cash flows from developing the broader airport precinct.''

Data also reveals parking revenue jumped to about $509,000 to the year end in 2017 from $458,000 previously.

''It's a good result. The rates are competitive so it's positive to see more people are using the carparks at a local level.''

Meanwhile seat numbers had been compounding at about 6 per cent per annum. For the year end in 2017 there were about 235,000 passenger movements compared with 222,000 over the same time frames in 2016.

Destination Rotorua chief executive Michelle Templer said the airport was a key gateway to the region and would shape the first impression of Rotorua for many visitors.

''Because of this it is important that the quality of this facility and sense of welcome matches that of the attractions and activities our visitors have come from all over the world to experience.''

Rotorua Chamber of Commerce chief executive Allison Lawton said the revamp was a significant milestone and ''confirms the confidence we have in our economy - we are growing''.

''Infrastructure investment is critical to our city and economy. We need it to continue to grow. Like any business or household, we all manage debt versus capital spend and I have confidence that there is strong rigour in the debt management for this organisation.''

She acknowledged feedback was understandably negative about the state of the airport.

''As the major tourism destination in New Zealand, we need to showcase our city, and the airport is a critical component in telling our story. If we compare to other tourism destination airports, we do not have a choice.

''They are investing in this vital asset, and Rotorua must too, to remain competitive.''

Rotorua Residents and Ratepayers Group chairwoman Glenys Searancke said the fire station was an absolute essential but she did question if the terminal upgrade was necessary.

''Is there really that much wrong with it?''

An Air NZ spokeswoman said Rotorua was a key destination for tourism.

On a typical week it had about 5860 seats into and out of Rotorua.

Rotorua Airport highlights 2017 year end
• Net surplus $614,400 vs budget of $106,200
• Passenger movements 234,929 vs 222,983
• RDC loan $15m vs starting balance of $18.6m
• BNZ Working Capital Account balance $0 facility limit of $3.5m
• Total assets 46m
• Net assets 30.6m
- source Rotorua Airport with subject to audit