Plans for transtasman flights to be reclassified as domestic routes are well advanced but many issues are still to be sorted, an industry spokesman says.
Yesterday, The Sydney Morning Herald website reported that making the route a common border by removing stringent immigration procedures could cut fares by up to 30 per cent.
But quarantine, security and immigration issues still have to be addressed.
An Open Skies bilateral agreement is already in place, relaxing the rules for carriers flying between the two countries.
After two years of discussions, Australian and New Zealand customs are planning trials to clear passengers before they board flights between the countries.
Dunedin International Airport manager John McCall told the Otago Daily Times the reclassification idea had been "on the agenda for a number of years" and he supported the move.
Issues surrounding duty-free, security, immigration and biosecurity would have to be agreed upon before the routes changed from international to domestic, he said.
"There has to be a lot of work, but we welcome it," Mr McCall said.
Three Australian automated border processing "smartgate" kiosks were installed at Auckland International Airport last September to speed up entry into Australia.
The trials will look at creating a clearance system similar to those used for passengers travelling from Canada into the United States and in Europe across European Union countries.
Once they are cleared at their point of origin passengers enter any port as a domestic visitor.
The Travel Agents Association of New Zealand told The Dominion Post the change was unlikely to lead to cheaper fares or reduced taxes.
Travel Agents Association chief executive Paul Yeo said while it would be delighted if the routes were reclassified as domestic, which would see a big increase in passenger numbers, he did not expect fares to drop, or taxes and fees to be wiped.
"What it will do is boost traffic. It will be a more competitive route in five or 10 years' time which will, if not drive prices down, keep increases under control," he said.
Air New Zealand, Qantas, Jetstar and Pacific Blue believe the move could result in fares being cut by up to 30 per cent.