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'Open Skies' Agreement Reached With Australia

“Historic, and over a decade in the making” was how Transport Minister Mark Gosche described a new ‘open skies’ Air Services Agreement announced today between New Zealand and Australia. A Memorandum of Understanding, giving provisional effect to the Agreement, was signed today by Mr Gosche and Australian Deputy Prime Minister and Minister of Transport, Hon. John Anderson.

“Australia is New Zealand’s most important bilateral economic partner. The new Agreement is an important step in the continuing development of CER.” Mr Gosche said. “I welcome the opportunities this new Agreement creates for our airlines to add further value to the relationship”.

The long-awaited agreement encompasses the Single Aviation Market Arrangements, signed in 1996 and replaces New Zealand’s oldest bilateral air services agreement, signed back in 1961. It allows the airlines of each side to operate services beyond the other country over any routing they choose, and with as many flights as they see fit. Previously, beyond services were limited to the equivalent of 12 Boeing 747 services per week, and to a maximum of 11 countries.

Additionally, there is now no requirement for airlines to file fares for approval, thereby allowing a more prompt response to changing market conditions and a reduction in compliance costs.

Airline ownership foreign investment restrictions have been removed. Effective control of New Zealand and Australian designated airlines will, however, remain with the nationals of their home country, and will continue to have their principal place of business in New Zealand or Australia, respectively. The provision for joint New Zealand and Australia airlines, operating within the Single Aviation Market, has been retained.

Local exporters stand to benefit should Australian airlines take up what are referred to as ‘seventh freedom’ traffic rights for cargo. These rights would allow an Australian company to establish a cargo-only airline in New Zealand to carry on services between New Zealand and third countries, with no requirement that the flight go via Australia. New Zealand airlines would have the right to establish similar cargo operations in Australia.

The Memorandum of Understanding (MoU), signed today, contains a commitment to examine the possibility of extending ‘seventh freedom’ traffic rights to passenger services. “Inclusion of these rights would place the Agreement truly at the leading-edge of bilateral air services arrangements” Mr Gosche said.

Also included in the MoU is a commitment to the adoption of mutual recognition of aviation-related certification by December 2003. “The Civil Aviation Safety Authority of Australia and the Civil Aviation Authority of New Zealand will be working very closely together to achieve this” Mr Gosche said.

“The New Zealand and Australia aviation markets are taking on an increasingly Australasian character, with Air New Zealand’s purchase of Ansett Australia and Qantas’ franchising of its brand in New Zealand” Mr Gosche said. “Mutual recognition is very important as a foundation for maximising the commercial and consumer benefits made possible by these arrangements.”


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