Australia has significantly improved its aviation relationship with the European Union (EU), opening up the possibility of greater competition and more flights on routes between the two continents.
In Brussels, Australia signed the agreement between the European Community and the Government of Australia on certain aspects of air services – also known as the Horizontal Agreement.
The agreement is a significant breakthrough, bringing the government closer to its ultimate goal of the complete liberalisation of air service arrangements between Australia and the EU.
The Horizontal Agreement recognises the existence of a single European market for air transport links to and from Australia, and provides for the designation of airlines based on their EU status rather than their member state’s nationality.
Australia currently has bilateral air services agreements with 16 EU Member States, including the UK, Germany and France.
The agreement will lock in the benefits of those agreements and form the basis of future discussions on a single Europe-wide agreement that removes many – if not all – of the limitations on air services between Australia and Europe. It could also address issues around competition, environmental protection, and safety and security.
Currently, services between Australia and European countries are limited by outdated bilateral agreements. For example, Australian carriers can only provide a maximum of three flights per week to Paris.
The EU is Australia’s largest aviation market, accounting for 20 per cent of Australia’s inbound and outbound passengers and a fifth of Australia’s total airfreight exports.
Over the past five years, annual passenger numbers have grown by an average of 5 per cent to reach 4.5 million people in 2007.
Visitors to and from Australia’s four largest European markets – France, Germany, Ireland and the United Kingdom – are forecast to increase from 1 million to 1.39 million by 2016, with the economic benefits to Australia expected to increase from $5.3 billion to $7.1 billion.
Australia’s Ambassador to the European Communities, Alan Thomas, and the Director-General for the EU’s Directorate General for Energy and Transport, Matthias Ruete, signed the Agreement.