The Department of Defence has left the door ajar for $65 million to be found to upgrade Newcastle Airport's runway to international standard.
Despite a concerted region-wide campaign, the project missed out on funding in the recent federal and state budgets.
The 'Code E' upgrade needs to occur in conjunction with a $120 million program of maintenance work at the adjoining RAAF base.
It is estimated the cost of upgrading the runway to international standard as a standalone project would be $200 million.
It was initially believed the RAAF works would commence in March, however, a defence spokeswoman clarified the works would start in mid-2021.
"There has been no delay to the planned airfield works at RAAF Base Williamtown," she said.
"The planned works are scheduled to commence in mid-2021, which is subject to the works receiving government and parliamentary approvals in the first half of 2021."
The timing means the government has the opportunity to announce funding for the upgrade in May budget.
It was a prospect that Prime Minister Scott Morrison raised in an interview on 2HD following the October budget.
"It's not off the table. It's a project that our teams are still working on, taking advice from the various agencies. The Defence Force also uses the facilities in that area," he said.
Newcastle Airport's existing runway was installed in the 1950s and has been resurfaced numerous times over the years.
Upgrading the strip to meet the needs of modern RAAF aircraft would involve creating a runway that is 800 millimetres deep with 350 millimetre flanges.
It is estimated the runway upgrade would create 4500 jobs and generate $12.7 billion in economic benefits through international airfreight, industrial expansion and increased tourism traffic over the next two decades.
Management consultant Oliver Lamb, who worked with Newcastle Airport on its business case for the runway upgrade, said international connectivity with regional centres was becoming increasingly important in the twenty-first century.
"Around the world what we are seeing is the emergence of destinations that haven't previously been on the map for non-stop flights and tourism," he said.
"Gone are the days when people could spend three or four weeks on vacation, people now want short breaks to different locations. That means places like Sydney and Melbourne where a lot of tourists have been to before have lost popularity for repeat visitors, they want to try out something new."
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