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Australia-New Zealand Open Skies Agreement

Australia and New Zealand have endorsed a historic open skies agreement, which will liberalise air travel between the two countries and beyond.

The Deputy Prime Minister of Australia, John Anderson, and the New Zealand Minister of Transport, Mark Gosche, initialled the agreement today and signed a Memorandum of Understanding to bring it into provisional effect immediately.

Mr Anderson said: “It is an important day for airlines and air travellers in Australia and New Zealand. The agreement will allow our airlines to expand their services and will further integrate our aviation industries. It will result in more competition and lower airfares.

“It is Australia’s first open skies agreement, and demonstrates the success of the Government’s aviation policy. Australia has two new domestic airlines, passenger movements along the east coast have increased more than 25 percent, and we have now reached our first open skies agreement.”

Mr Gosche said: “The agreement is long awaited. It is an important step in the development of Closer Economic Relations, and creates new business opportunities for our airlines and their customers.”

The open skies agreement will allow Australian and New Zealand international airlines to operate across the Tasman and then beyond to third countries without restriction. Previously, beyond services were limited to 12 Boeing 747s per week to a maximum of 11 countries.

In addition, the international airlines of both countries will be able to operate dedicated freight services using what are known as seventh freedom rights. They will be able to operate from any international airport in Australia and New Zealand to third countries, providing greater opportunities for exporters.

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The agreement will formalise the Single Aviation Market (SAM) arrangements, which were signed in 1996. The SAM arrangements allow all Australian and New Zealand owned airlines to operate trans-Tasman services and domestic services in either country, subject to the necessary safety approvals.

The existing customs, immigration, and quarantine requirements will not be affected by the agreement.

Mr Anderson said: “The Australian and New Zealand airline industries are now highly integrated as a result of Air New Zealand’s investment in Ansett and the recent launch of Qantas New Zealand.

“To expand the benefits of integration, we have agreed that Australia and New Zealand will recognise each other’s aviation safety approvals by December 2003.

“Mutual recognition will enable our airlines to operate to, from and within either country on the basis of their home certification. It will enable Australian and New Zealand airlines to integrate their fleets and make them more efficient and competitive.”

Mr Gosche said: “Australia is not only our largest tourism market but also our most important trading partner. It is important that these links are developed through CER and arrangements such as this. In addition to this more than 800,000 New Zealanders travelled to Australia last year alone.

“We have also agreed to examine the possibility of extending seventh freedom traffic rights to passenger services. The inclusion of these rights at a future time would put the agreement at the leading edge of bilateral air services agreements.”

The agreement must now be formally ratified in accordance with each country’s treaty processes.

THE OPEN SKIES AGREEMENT AT A GLANCE

The main provisions of the new agreement and MoU are:

 Australian and New Zealand international airlines will be able to operate unrestricted international services across the Tasman and continue those services beyond to third countries.

 Australian and New Zealand owned airlines will be able to operate unrestricted services across the Tasman and domestic services in both countries, subject to safety approvals.

 Australian and New Zealand international airlines will be able to operate dedicated freight services from either Australia or New Zealand to third countries. For example, a New Zealand international carrier could operate a freight service from Australia without flying through a New Zealand port at any stage of the journey.

 All international services will continue to operate to and from designated international airports. The existing customs, immigration, and quarantine restrictions will not be affected by the agreement.

 Airlines will make commercial decisions on the number of services they operate and the destinations they serve. Airlines will no longer have to obtain government approval for their airfares, subject to Australia’s legislative processes.

 Domestic competition laws will continue to apply to the operation of the airlines of both parties. In addition, the two governments will use their best endeavours to ensure fair access to airports in both countries.

 Australia and New Zealand will mutually recognise each other’s air safety approvals by December 2003.

 Australia and New Zealand will examine the possibility of introducing seventh freedom traffic rights for passenger services. The introduction of seventh freedom rights would allow (for example) an Australian international carrier to operate from New Zealand to a third country without flying to an Australian port at any stage of the journey.

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