Singapore and Australia 'close to open skies deal'

SINGAPORE - Singapore and Australia are close to signing an open skies pact that would give flag carrier Singapore Airlines long-sought access to lucrative US-Australian routes, a Singapore official said on Monday.

The pact would open up Australia-Los Angeles flights, described by analysts as one of the world's strongest-performing routes and a major revenue stream for Australia's Qantas Airways, to government-controlled Singapore Airlines. It has implications for New Zealand, with which Singapore already has an open skies pact. 

"We are almost there," Singapore Transport Minister Yeo Cheow Tong told reporters on the sidelines of an aviation conference.

"The remaining limitations on Qantas are actually very, very few... The remaining key issue for Australia is the 'fifth freedom rights' to America," Yeo said, adding that the timing of a deal looked "not too far away".

Fifth freedom rights allow airlines to take on passengers in a first destination country and carry them to a third country.

Qantas has lobbied Australia's government to block a full open skies pact on grounds that the competition could hurt profitability just after it recovered from weak travel during Asia's 2003 Severe Acute Respiratory Syndrome virus outbreaks.

Singapore and Australia signed an air services pact in September 2003 that removed restrictions on their airlines on the frequency of flights between the two countries but this fell short of a full open-skies deal.

Yeo said he would discuss the open skies pact with his Australian counterpart John Anderson in mid-February. Singapore Airlines has long sought access to the trans-Pacific route and Australia said last week the poor international aviation climate, which had so far prevented it from opening up the route, was stabilising.

Currently Singapore Air only has "through rights" to fly to New Zealand from Australia, but it cannot pick up passengers in Australia.

It cannot fly from Australia to other countries unless it stops over in Singapore first. An "open skies" deal would radically change this. Singapore has open skies pacts with the United States, New Zealand, Brunei, Chile, Peru and the United Arab Emirates.

It is also in talks with India and China to liberalise air travel between Singapore and those countries.

- REUTERS