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Australia signs open skies agreement with China

written by australianaviation.com.au | December 5, 2016
Air China's inaugural Sydney-Chengdu services is welcomed at Sydney Airport. (Sydney Airport/Kurt Ams)
Another day, another Chinese airline inaugural. Air China’s inaugural Sydney-Chengdu services is welcomed at Sydney Airport in November. (Sydney Airport/Kurt Ams)

Chinese airlines will have unrestricted capacity into Australia after the federal government announced it had reached an agreement with China for an “open aviation market” between the two countries.

The agreement, announced on Sunday, paves the way for China-based carriers to maintain the furious pace of growth into this country in recent times, catering for the increasing number of Chinese tourists travelling overseas.

Minister for Infrastructure and Transport Darren Chester said opening up aviation capacity in the Australia-China air services agreement had been a top priority since he took up the portfolio.

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“These new arrangements will remove all capacity restrictions between Australia and China for each country’s airline which is an important enabler for increased trade and tourism,” Chester said in a statement.

While the most obvious benefit will be for Chinese carriers, who are now free to continue their rapid expansion into this country, Chester noted the new agreement also contained some benefits for Australian flag carriers.

“We have also liberalised traffic rights and code share arrangements, which are important for Australian airlines,” Chester said.

“This will enable Australian and Chinese airlines to service destinations between and beyond both countries, and will allow them to take full advantage of their cooperative arrangements with their commercial alliance partners.

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The Australia-China air services agreement was most recently expanded in January 2015, which increased the available capacity for both flights between the major cities of China (Beijing/Guangzhou/Shanghai) and Australia (Brisbane/ Melbourne/Perth/Sydney) as well as between so-called secondary cities in China.

Currently, there are seven Chinese airlines flying to Australia. Meanwhile, there is just one nonstop flight from an Australian flag carrier to China – Qantas’s daily Sydney-Shanghai service, although Qantas will also resume Sydney-Beijing nonstop flights from late January 2017.

Virgin Australia has proposed operating to Hong Kong and Beijing from June 2017 as part of a commercial alliance with HNA Group. However, it has offered few details publicly about their proposed flights.

Sydney Airport chief executive Kerrie Mather welcomed the announcement.

“This decision delivers expanded bilateral capacity ahead of demand, maximising the value to the visitor economy,” Mather said in a statement.

Australian Airports Association chief executive Caroline Wilkie hoped the open skies agreement with China would lead to further additional capacity in other air services agreements.

“Today’s announcement will provide further impetus for growth in travel between Australia and China and means that airlines and airports can continue working together to provide more flights and better services between the destinations unconstrained by capacity limits on the number of flights or seats,” Wilkie said in a statement.

“We look forward to continuing to work with the Government and other stakeholders to remove constraints on air access from other markets where possible, in order to facilitate the continued growth and contribution of our airports and aviation industry to the Australian economy.”

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13 Comments

  • deano

    says:

    I wonder where VA will deploy their A330s now ?

  • Darren

    says:

    When will Qantas fly their own metal direct ex Brisbane instead of doing the horrible Sydney trip.

  • Marc

    says:

    @Darren
    Do a TAA. Try Another Airline.

  • Jim

    says:

    These sorts of deals need to include a quota of pilot training for the airlines cadet pilots being undertaken in Australia so as the training industry benefits as well.

  • Craig

    says:

    The effect of this will decimate the limited opportunity for Australian airlines to remain competitive and enter expanding markets.
    The effect will be felt on multiple levels.
    Inbound tourism will increase: airport revenue, commerce, tourism, oncarriage..
    Infrastructure constraints will be tested, (who gets priority)
    Skills will be extracted from Australian based carriers from an already strained resource group.
    Markets will be distorted.
    Protectionist behavior Australian style is nothing compared to that of others.
    The country will pay dearly, (our country).

  • Anil Kattula

    says:

    Does this include Hong Kong and how is it going to work when many of China’s airports are already heavily congested,with slot restrictions? Of course Qantas won’t be involved except from Sydney!

  • Darren

    says:

    Awaken the giant! This will decimate the Australian aviation market! China has massive resources with massive government funding to back up loss making routes to ensure Qantas and Virgin can’t compete.

    I hope that Hong Kong is included in this agreement or it will skew the market to cheap, low quality, low service airlines.

    Great move for the Australian tourism industry. Not a smart move for Australian aviation. Start learning Mandarin everyone for when you are made redundant and have to move your jobs to the Chinese airlines

  • Adrian P

    says:

    I take it that the open skies includes the South China Sea, so I assume freedom of navigation sorties will not be required by the ADF. So who will we be using our JSFs against?

    Mixed messages.

  • Luke

    says:

    This is great, I don’t see how this will negatively impact Australian airlines, due to both having partnerships with Chinese airlines and second the only Australian – China flight operated by a Australian Airline is Qantas’s one destination of Shanghai from Sydney, why should the be protected when they offer the most limited amount of flights. It will be good for Perth having the caps removed because it will allow more airlines to fly their because they don’t want to waste their quote on the larger eastern states which takes priority.

  • Geoff

    says:

    Ummm, any one day I see many Emirates aircraft flying from our capital cities to and from Dubai,New Zealand and Singapore, Now we are going to get a swag of Chinese aircraft between their big cities and ours.
    I guess good for tourism, but terrible for Qantas and VA. Though that said, Due to no competition, Emirates are priced at Qantas level, and I wonder if the Chinese companies(with their Government’s help) will price them selves below Qantas/VA and force out any idea of us expanding into their airspace as our Government will not subsidise our industry…or will it?

  • mike9

    says:

    my wife is Chinese with extensive business and travel interests. the average Australian has no idea how big the market will become for inbound tourists. Qantas was dragged kicking and screaming into China, and still doesn’t seem to show much interest in servicing the Chinese market.
    Qantas still thinks everyone wants to go to England. look at how excited they were to try and get a flight from Perth -London, the majority of our travel now is in the pacific basin, one day the will understand that.

  • KeithMcc

    says:

    This will be the same as Japanese tourism of the 1990’s. Chinese tourists will fly in Chinese planes, travel on Chinese owned buses, stay at Chinese owned resorts and hotels employing Chinese workers on 457 visa’s.

    The airports might make something from landing charges, but this just continues the great sell off of Australia for very little return.

  • AB

    says:

    What next China Southern Domestic operating in Oz.

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