AFP
Last Update: Monday, September 22, 2003. 8:07pm (AEST)
Singapore, Australia to sign air-services agreement
Singapore and Australia will sign an agreement to expand their aviation links tomorrow, officials said, however the deal is not expected to lead to an immediate "open skies" policy between the two nations.
Australian Deputy Prime Minister John Anderson held talks with Singapore's Transport Minister, Yeo Cheow Tong, with a press conference to announce the agreement scheduled for Tuesday.
Mr Anderson told a business lunch ahead of his meeting with Mr Yeo that the agreement would "work towards an open skies agreement".
Aviation analysts said his comments confirmed "open skies", which would allow national carriers Singapore Airlines (SIA) and Qantas much greater freedom to operate from each others' territory, had been put on the slow track.
They said SIA's key goal of being able to fly the lucrative Australia-Los Angeles route would not be part of the deal following strong opposition from Qantas.
Qantas has lobbied the Australian Government to not allow the open skies agreement with Singapore to expose it to competition from SIA on the Australia-US route.
"I know they had been definitely talking about open skies between the two places," a regional aviation analyst at ING Financial Markets in Hong Kong, Philip Wickham, told AFP.
"That's been taken off the table now, given the concerns of Qantas."
A Singapore-based aviation analyst said SIA would most likely instead be allowed to fly more services into Australia, and possibly from Australia to Fiji and other Pacific Islands.
In return, the analyst said Qantas would be given more rights to operate out of Singapore to elsewhere in South-East Asia and possibly to Europe, although the Australian carrier did not need those extra services in the short-term.
SIA has also reinforced its assertion that it should be allowed to fly out of Australia with less restrictions, citing the free trade agreement between the two nations which went into force in July.
"We do not fear competition and do not see why anybody else in the industry should either because competition is what makes us all work harder and bring real benefits to consumers," SIA spokesman Innes Willox said.
--AFP
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