The $110 million Newcastle Airport expansion project is slightly behind schedule and facing cost pressures, but chief executive Peter Cock says the new terminal will still be "amazing".
Federal Infrastructure and Transport Minister Catherine King inspected progress on the terminal building on Wednesday after work started six months ago.
The airport had hoped to open the new double-storey section of the terminal building this year, but Dr Cock said that timetable had been pushed back to the second quarter of 2025.
He said delays were "something that's playing into all construction projects at the moment, so we're not immune to that".
The federal government is contributing $55 million to the terminal.
The airport, which is owned jointly by Newcastle and Port Stephens councils, has borrowed the rest from the Commonwealth Bank as part of a $240 million debt arrangement to fund the terminal and develop the nearby Astra Aerolab commercial precinct.
The government is also spending $66 million upgrading the runway for the air force and so the commercial airport can accommodate wide-body passenger planes capable of flying international routes.
Dr Cock said the airport would have to modify its terminal designs in light of cost pressures, but this would not affect its ability to accommodate overseas flights.
"With budgets, every time you open a tender document you've got to see what comes out, so there is pressure on our budget," he said.
"We're trying to cut our cloth to make sure we can deliver what we need within our means.
"What we can be clear on is we're not going to compromise on being able to move people and goods into and out of Newcastle, the destinations we can hit and the code E capability.
"It's going to be an amazing airport to be in, which is what people expect."
Dr Cock said the cost "over-runs" were due in part to supply-chain issues, but the project was "well under way and steadily progressing".
