``OPEN SKIES'' WITH UNITED STATES MAXIMISES OPPORTUNITIES FOR AIRLINES

"Cabinet has today given its approval to the new Open Skies Air Transport Agreement between New Zealand and the United States," says Transport Minister Jenny Shipley.

"The agreement was negotiated by officials 10 days ago, and Cabinet has now authorised me to sign it on behalf of the New Zealand Government, which I expect to do when I visit the United States next week."

``This agreement has the potential to increase tourism to this country from the United States, as New Zealand airlines take up opportunities to fly to more cities in the United States beyond the West Coast gateways. The removal of all restrictions on international air services operated by New Zealand airlines to, from and beyond the United States will assist in maximising the profile of New Zealand in that market.

``It's also an important agreement for exporters and importers as it means that the airlines of one country may establish cargo services which operate solely between the other country and third countries. To use the aviation industry jargon this is called an exchange of ``seventh freedom'' cargo rights. This provides for United States airlines to operate dedicated cargo services between New Zealand and any other market which accepts a United States airline operating in such a manner, and for New Zealand airlines to do likewise between the United States and other markets. That has the potential to provide significant additional capacity and choice for exporters.

``The Agreement also removes the requirement that airlines submit tariffs to the respective authorities for approval before those tariffs may be made available to consumers. This means that airlines will have the maximum flexibility to develop and implement innovative and competitive prices, in line with market conditions.

``The Agreement is fully consistent with the objectives of APEC economies in progressively moving to free and open trade in goods and services.

``The Coalition Government looks forward to further liberalising air services arrangements with the United States and with other partners, particularly in APEC. The aim is to maximise opportunities for airlines to provide efficient and competitive air services to the benefit of the New Zealand business community and the wider travelling public.

``I hope to sign this Agreement on behalf of the Coalition Government with the United States Secretary of Transportation, Rodney Slater, during my visit to Washington DC next week. It is a very positive development in the overall New Zealand/United States relationship, and reflects our shared interest in enhancing trade and economic relations,'' Mrs Shipley concluded.