Australia-Chile air services agreement expanded

“This doubles the previous capacity and opens up opportunities for Australian airlines to better serve holiday-makers and other travellers to South America,” Truss said in a statement on Monday.

Qantas currently offered three flights a week between Sydney and Santiago with Boeing 747-400 aircraft and has sometimes added a fourth weekly service during peak periods.

Meanwhile, Chile flag carrier LAN, part of the LATAM group of airlines, flew daily from Santiago to Sydney via Auckland with Airbus A340-300 aircraft. The airline was due switch from the four-engined Airbus to Boeing 787 Dreamliner aircraft from April.

The pair codeshares on each other’s services and Truss said Qantas and LAN would have even more flexibility to build their networks and serve new markets through joint services after all restrictions on the airline’s ability to codeshare were removed as part of the new agreement.

“Open code share is a key objective for Australian airlines, as it enables them to build networks that support their investment in key hubs, such as Santiago,” Truss said.

“It will now be possible for Qantas to build on its existing code share relationship with the LATAM Airlines Group to link Australia with even more destinations across South America, via Santiago.

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“The Australian Government is committed to ensuring that we have the aviation capacity necessary to meet future demand and to ensure that Australian airlines can grow and compete internationally.”

The expanded codeshare agreement comes after Australia’s International Air Services Commission (IASC) noted in a August 2014 decision allowing Qantas to increase capacity on the Sydney-Santiago route that “Chilean carriers are effectively operating at their capacity limit, and are unable to increase capacity on the route without further liberalisation of the air services arrangements to increase capacity entitlements”.

Further, the Commission noted that Qantas sought in its application the flexibility to use extra capacity to provide services jointly with LAN.

“Absent the codeshare,it is extremely unlikely LATAM would be able to increase its services to Australia in the short to medium term,” the IASC said.

The expanded bilateral agreement with Chile is the second air services agreement to receive a capacity boost in recent times, after the government negotiated more capacity for Chinese and Australian carriers on Australia-China routes in January.