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Sat, Jul 31, 2004 - Page 12 News List

Easing of rules seen as helping Asia's aviation industry

BLOOMBERG

Asia's aviation industry may expand and become more competitive after the region eases restrictions on air services, US Secretary of Transportation Norman Mineta said in Indonesia, after talks with APEC transport ministers.

Asian countries are "trying to boost their airlines to function efficiently," Mineta said in an interview during the APEC's transport ministers' meeting in Bali.

"What this does is to make airlines more competitive," push them "to be prompt with their schedules" and compel them to "have competitive fares," he said.

Singapore Airlines, Cathay Pacific Airways and other Asian airlines are enjoying a rebound in global tourism and economic growth, after the SARS outbreak deterred air travel last year. Eco-nomic growth in China, Japan and the US have led to more tourist arrivals and encouraged more business travel.

Singapore Transport Minister Yeo Cheow Tong said earlier this week that his city-state expects to reach an agreement by early next year with Australia to remove flight restrictions between the two countries. The agreement would allow Singapore Airlines to fly to the US via Australian cities. Singapore's Changi airport may handle as many as 30 million passengers this year, Yeo said.

The agreements "will benefit the incumbent players in the market because they are the most ready and most of them are supported by the governments," said Peter Harbison, managing director of the Centre for Asia-Pacific Aviation in a telephone interview from Sydney.

"The open skies agreements mean there will be a lot more routes in the region," he said.

The US and Indonesia signed a similar open-skies pact this week, taking away limits on flight frequencies, aircraft types and fares on passenger and cargo services.

The agreement lets Continental Airlines, the fifth-largest US carrier, add routes to Indonesia, while Northwest Airlines Corp, the fourth-largest US carrier, may cooperate with Indonesia's biggest carrier PT Garuda Indonesia on a new route.

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