Friendly neighbours ... prime ministers John Key and Kevin Rudd. Photo: Dean Sewell
A common border will dispense with trans-Tasman customs and immigration, writes Clive Dorman.
The airlines are promising a travel revolution between Australia and New Zealand, beginning in less than a year if politicians make good their promise to turn air routes between the two countries into domestic routes that don't need customs and immigration processing.
The Australian Prime Minister, Kevin Rudd, and his New Zealand counterpart, John Key, agreed at a bilateral meeting earlier this month to make the creation of a common border between the countries a priority.
The airlines say the move will cut operating costs on the Tasman - and therefore fares - by at least 30 per cent and will lead to an explosion in the number of new routes being flown, with destinations such as Avalon, Newcastle, Maroochydore and Hamilton Island on the Australian side and Hamilton, Palmerston North and Queenstown on the NZ side set to benefit most.
The idea was first mooted nearly two decades ago but lapsed when the incumbent airlines, Qantas and Air New Zealand, put it on the back-burner, saying they had higher priorities.
But it has been put back on the agenda by the low-cost airlines, which say the high cost of international travel - extra airport charges and government taxes that don't apply to domestic travel - are limiting trans-Tasman travel.
Bruce Buchanan, the chief executive of Australasia's biggest low-cost carrier, Jetstar, has driven the campaign to reach agreement on a new common border and believes for the first time, the political will is there.
The deal was discussed in talks between the prime ministers at Kirribilli House in Sydney earlier this month.
"It's one of those things we've decided to see if we can get an agreement within the year," Rudd says. "We've decided rather than just have it languish in never-never land, to bring it into decision-making territory."
Buchanan says it's a win-win.
"If you want an economic stimulus package and you want to drive tourism in the current environment, I can't think of anything that's going to drive a greater increase in passenger movements," he says. "And if we want to bring the two countries closer together in terms of trade and economic integration, this is a great thing to do.
"For us, it's driving growth and stimulating new markets and that is what we're all about."
Buchanan says the savings for the airlines would be about $60 a passenger one-way.
"If you take out $60 worth of fixed costs, you can do all sorts of exciting things," Buchanan says. "Typical prices can come down from $200-$210 to $140-150 [one-way].
"And it just changes the whole psyche of the trip. You know the hassle of going to an international airport and all the crap you've got to go through to get through. But this would be a domestic terminal, 30-minute close-out, rock straight through and you're on your aircraft.
"Because of lower costs, you can stimulate new markets with lower pricing. That means more markets like Newcastle-Auckland or Newcastle-Christchurch become viable because you don't have to have the high fixed costs of international travel built into the system."
