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Australia and the United States have finalised their much anticipated Open Skies Agreement, giving airlines the freedom to determine the frequency of services and routes between the two countries without government interference.
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"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," Transport Minister Anthony Albanese said in a statement.
"Over time this will lead to greater choice through increased competition and provide significant employment opportunities for Australians in the aviation and tourism industries," Albanese added.
The new agreement will see Virgin Airlines' V Australia proceed with plans to introduce air services between Australia and the US later this year. The launch of V Australia would intensify competition on the route, which is currently dominated by Qantas and United Airlines.
The CEO of Qantas, Geoff Dixon said that Qantas supported the Government's efforts to liberalise air services arrangements between the two countries.
"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," Dixon said.
Qantas currently operates 48 services a week on the Pacific route, with flights set to increase to 51 from March. Qantas also offers an extensive range of code share connections on partner airlines in the US, which could be increased under the liberalised arrangements.
Meanwhile, Flight Centre Managing Director Graham Turner said that increased competition would spark a new wave of airfare discounting. Travellers on the trans-Pacific route have traditionally endured highly inflated prices due to the limited competition and capacity on the route. In fact, fares have often exceeded prices longer routes to the UK and Europe.
“History has shown that competition in the aviation sector delivers real benefits to travellers and the tourism industry in general,” Turner said. “This has been clearly illustrated in the Australian domestic market, with travellers enjoying an unprecedented wave of discounting following the arrival of Virgin Blue, Jetstar and Tiger.”
Source | e travel blackboard
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