Minister for Infrastructure, Transport, Regional Development and Local Government, Anthony Albanese, has announced that Australia and the United States had settled the terms of a new ‘open skies’ air transport agreement.
Australian and US airlines will now able to determine the frequency of their air services, and the routes they wish to serve without government interference.
Previously new entrants to the route were only guaranteed four services weekly, making it difficult for new airlines to start services.
Australian travellers, trade and tourism will benefit as designated airlines will be able to operate unlimited services between the two countries, via other countries and beyond to other countries.
Over time this will lead to greater choice through increased competition, and provide significant employment opportunities for Australians in the aviation and tourism industries.
"This agreement demonstrates the strength of the Australia-US relationship" Mr Albanese said.
Mr Albanese also said the agreement highlighted the Australian Government’s strong commitment to Australian travellers.
"The United States is Australia’s third largest aviation market and this agreement removes restrictions on Australian and US airlines starting services and routes between the two countries and beyond to third countries," Mr Albanese said.
Mr Albanese said that Australia was a strong advocate of liberalising air services between Australia and the US, while at the same time securing our national and economic interests.
"The new agreement will provide great opportunities for increasing trade and commercial links between Australia and the United States.
We will have more competition in the market for Australian travellers through the entry of new carriers, such as V Australia," he said.
"This should result in greater choice for Australians travelling to and from the United States and to other destinations", Mr Albanese said.
"The new arrangements will enable V Australia to proceed with its plans to introduce air services between Australia and the US from late this year.
"The Agreement will also provide certainty for Qantas and Jetstar to plan into the future, and widen the network of cities they serve in the United States.
"Any airlines wishing to take up the commercial opportunities available under the new arrangements would need to obtain relevant regulatory requirements before commencing operations, including meeting Australia’s stringent aviation safety and security requirements," he said.
The new arrangements become effective immediately, pending formal approval of the new treaty by the respective Governments.
The agreement has been welcome by both Qantas and Virgin Blue.
The chief executive officer of Qantas, Mr Geoff Dixon, said the airline had supported the Australian Government’s efforts to seek fully liberalised air services arrangements between the two countries at negotiations in Washington this week. This had been largely achieved.
"We welcome the outcome. It brings new opportunities for growth and competition. Importantly, it will assist the further development of Australia’s aviation industry, as well as help increase trade and tourism with a major economic partner," Mr Dixon said.
The Qantas Group is currently operating at its highest ever frequency – 48 services per week – on the Pacific route. This will increase to 51 services per week as from March. In addition, the airline offers an extensive range of code share connections on US partner airlines to cities within the US, which can be increased under the liberalised arrangements.
Mr Dixon said Qantas was pleased to note the emphasis that the Government was giving to securing increased opportunities for Australian carriers.
"Further liberalisation of air services arrangements with a number of countries is needed if Australian carriers are to grow operations and match opportunities available to foreign competitors."
Mr Dixon said the airline had recently identified a range of markets where liberalisation would be required if Qantas and Jetstar were to fully implement commercial plans.
"We hope to see our commercial plans and priorities reflected in the Government’s agenda for future air services negotiations," he said.
Virgin Blue Airlines also congratulated the Australian and US Governments for "introducing a new era of competition for air services between the United States of America and Australia".
The airline is preparing to launch its V Australia international subsidiary and will unveil first details of its in-flight product and inaugural operations next month. V Australia will operate flights with Boeing 777-300ER aircraft commencing in late 2008.
“The Australia-US Open Skies agreement is a great achievement and a significant change after almost twenty years of restrictive bi-laterals,” Virgin Blue chief executive, Brett Godfrey, said.
“The agreement and the approvals granted underline the commitment of both Governments to extensively liberalise Australia-US air services, a decision we strongly endorse and one which will bring significant benefits to both countries.”
“We are also particularly proud of the contributing role we have played as a catalyst for the establishment of this agreement. It will enable us to bring long awaited, genuine competition to the trans-Pacific market,” Mr Godfrey said.
The approvals granted at the Open Skies talks in the United States will enable V Australia to commence operations with 10 weekly frequencies between the countries.
"This is tremendously exciting for our team and opens a whole new range of possibilities for us and for the travelling public.”
"After eight years we believe we’ve proven our ability through Virgin Blue to stimulate change and innovation to the benefit of air travellers, tourism and the economy and V Australia will again be a catalyst for change, this time in the arena of international long haul aviation.”
“We would also like to acknowledge the hard work and willing co-operation of the Government negotiating team to facilitate the agreement,” Mr Godfrey said.