- The Washington Times - Saturday, February 16, 2008

SYDNEY, Australia (AP) — Australia and the United States have agreed to drop restrictions on air service between the two countries, clearing the way for increased competition on one of the world’s most lucrative and protected long-haul routes.

The bilateral agreement abolishes all restrictions on U.S. and Australian air services for carriers of both countries.

It ends a virtual duopoly on the route held by Qantas and UAL Corp.’s United Airlines.

Qantas controls 75 percent of the market share on the Australia-U.S. route, from which it derives around 15 percent of its net profit.

The deal will allow Australian carrier Virgin Blue Holdings Ltd. to begin flights to the United States by the end of the year — but leaves Singapore Airlines Ltd., which has long coveted the route, still without access.

It would also “provide certainty” for Australia’s Qantas Airways Ltd. and its budget offshoot Jetstar, allowing them to widen the network of American cities they currently serve, Australian Transport Minister Anthony Albanese said in a statement.

U.S. carriers Delta Air Lines Inc. and Continental Airlines Inc. said they have no immediate plans to add service to Australia.

“However, as we continue to build on our robust international network, we continue to closely monitor markets worldwide and stand ready to take advantage of the right opportunities,” said Delta spokeswoman Betsy Talton.

A spokesperson for Northwest Airlines Corp. had no immediate comment, and AMR Corp.’s American Airlines could not immediately be reached for comment.

The agreement comes after three days of negotiations in Washington and will take effect once formal approval from the U.S. and Australian governments is granted.

The agreement only applies to American and Australian carriers.


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