New Zealand is focusing on Australia and a transtasman travel bubble ahead of the Pacific Islands, Prime Minister Jacinda Ardern said today.

And she has taken a swipe at Air New Zealand over the way the airline has handled the non-refunding of airfares to customers.

Despite mounting pressure to open the borders to countries such as the Cook Islands and Niue - both Covid-free, like New Zealand - Ardern told Newstalk ZB's Mike Hosking today that the Government was focusing on a transtasman bubble.

"We are focusing on Australia first."

There were a "huge number" of reasons for this - "not least tourism not going one way for us, but also New Zealand's closer economic relationship with Australia. We put that in a special category".

New Zealand was working on a framework with Australia that would then apply to the Pacific Islands as well.

New Zealand was looking at cases in those countries, as well as any cases of community transmisson and testing levels.

Fiji, for example, did not have any more cases but New Zealand had to be sure its testing regimes were rigorous. "Their testing has been lower."

There was no timeframe on a transtasman bubble "because Covid hasn't had a timeframe".

"Essentially we need to make sure Australia is in a similar position as us. They aren't yet. New South Wales, Victoria... Victoria in particular are still seeing cases coming through.

"It will be a joint decision but we will set some parameters. We need to set up a framework and the Pacific are interested now as well. We need a framework that we can apply more broadly."

The requirements were not necessarily zero cases - the framework needed to accommodate the ongoing management of cases. If New Zealand had five cases at the border, for example, we would not want that counting against us - those cases would need to be quarantined.

"It's not a case of New Zealand sitting here and saying no to Australia. Australia are saying they are not ready yet either."

It was a matter for Australia whether a travel bubble with New Zealand was country-wide or individual states.

On the subject of Air New Zealand airfares not being refunded for cancelled flights, she said: "I do think Air New Zealand could have handled it better."

"We want to make sure customers are looked after and that means communication could most certainly have been vastly improved."

She acknowledged Air New Zealand's comments that they would be in a difficult financial position if they refunded all non-flexible fares. Instead the airline has given credits to many customers.

"They have also apologised for some of the management of the issue as well."

The government would look at whether it needed to bring consumer legislation in line with EU and US regulations, but this would not be retrospective.

She said she had no regrets of the past 10 weeks. "I would like to think the hard work of all New Zealanders apeak for themselves. We have done really well as a nation... we are not done yet."

She said the same amount of rigour that the country had spent on the health response would now be applied to the economy.

Meanwhile, Ardern told Hosking that a KiwiRail electrification project that had gone to offshore companies - to the anger of local firms Fletcher and Downer - would still be putting money in Kiwi workers' pockets.

One of the companies that had won the contract, McConnell Dowell, had been in New Zealand for 50 years. "It's going to be Kiwis on the job."

"Mike, you would be the first to annihilate me... we have an obligation to follow a proper tender process. We also have obligations to make sure we follow international trade obligations."

On the question of whether an ex-Russian spy - who was poisoned along with his daughter in Britain - was now in New Zealand, she said: "Whilst I am not going to confirm nor deny, I am going to say you shouldn't believe everything you read."