The long-awaited shake-up of aviation law will have airlines and airports a little edgy.

Released with little fanfare on Friday by Transport Minister Phil Twyford, the Civil Aviation Bill is seen as a once-in-a generation opportunity to get governance of the sector right by updating and streamlining the rules.

The minister says all parts of aviation will be affected by the changes and he's right - through 400 clauses it covers everything from new ''bottle to throttle'' drug and alcohol rules for pilots to updating law to protect aviation security dogs.


Airlines will be looking with interest at the new provision to allow passengers who have lost luggage or had it damaged to chase them up through the Disputes Tribunal, which can award up to $20,000.

International conventions limit liability at just over a tenth of that now.

There's an element here of providing a big solution to a small problem as sophisticated electronic tagging means very few bags are lost these days and many travellers have insurance.

But that's part of a welcome consumer-friendly tone to parts of the legislation, expected to be passed into law around the middle of next year.

Commentary with the draft bill rightly questions whether passengers here are well informed of our rights - we're not.

It alludes to Europe's highly proscriptive rules.

Airlines operating in Europe must provide all passengers affected by a cancellation or delay of more than two hours with written notice setting out rules for compensation and to display a sign at the check-in counter describing those rights.

These rules were put in place because of bad behaviour by some notorious budget carriers in Europe. We're not so badly served here and conditions of carriage do appear in the small print of tickets but they're seldom read and can be fiendishly complex.

The Ministry of Transport is calling for submissions on the bill which at the moment doesn't allow for similar regulations to be made in New Zealand but the bureaucrats say they should change.

''We propose that the new bill contain new regulation-making powers to require the information to be disclosed.''

Airlines will also be analysing closely signals of a new approach to overseeing alliances.

These have been game changers for carriers such as Air New Zealand which has formed partnerships with others including Cathay Pacific, Singapore Airlines, Air China and United.

Airlines need them to make some routes economic and provide a better service for travellers, but because they involve competitors or potential competitors agreeing on flights and fares they have the potential to reduce competition and cut capacity - leading to higher prices.

Rules could be changed to allow passengers to take airlines to the Disputes Tribunal over bags. Photo / 123rf
Rules could be changed to allow passengers to take airlines to the Disputes Tribunal over bags. Photo / 123rf

Commentary with the bill (known as the exposure draft) is aimed at stimulating discussion and resolve any practical problems with what is complex legislation.

It says laws haven't kept pace with new alliance developments.

Under existing law full consideration of the impact of the alliance arrangements is not considered, the process is opaque without enough consultation with interested parties.

''The bill improves transparency of the process of considering applications for authorisation and provides that the minister must take the main and additional purposes of the (future) Act into account when determining if an airline cooperative arrangement is in the public interest.''

Airport price setting is also under the microscope in the legislative overhaul.

The existing Civil Aviation Act has a section that allows airport companies, after consultation, ''to set charges as they think fit.''

On its own, the provision ''has not proven effective'' in countering the difficulties faced by small airports which often have to negotiate with one major airline customer when
seeking to change prices.

At the other end of the airport size spectrum, airlines consider that the section hinders commercial negotiations between airlines and large airports, and allows airports to ignore the views of their customers.

But because other laws, including the recently amended Commerce Act, cover price setting the new bill proposes repealing the ''charge as they think fit'' section.

The commentary does pose a question that will be a red rag to a bull for airlines. They do battle with our three biggest airports every five years over price setting, the latest being a skirmish with Auckland Airport which forced a $33 million backdown:

"Does the proposed policy change along with recent changes to the Commerce Act support a robust regulatory regime for major international airports?'' the ministry's mandarins ask.

Feedback on the bill is being sought through the ministry's website by July 6. If you travel by air and think there's a need for change, now's the chance to let the lawmakers know what you think.