Australia and the USA have agreed to initiate bilateral discussions with the goal of forging an open skies accord by early next year.

Existing open skies arrangements between the two countries are limited to cargo services.

However, Australia's deputy prime minister Mark Vaile and US transportation secretary Mary Peters on October 4 revealed their intention to conclude a comprehensive open skies aviation agreement, with detailed terms expected to be hammered out in early 2008.

Open skies between the two countries would permit carriers to determine the frequency of their air services, the routes they wish to serve, and the prices they wish to charge, without governmental interference. Australia's Qantas Airways currently offers the most connections between the two countries, with links from Sydney and Melbourne to several US gateways.

"The commitment to these [open skies] discussions recognizes that the liberalization of international air services, in parallel with the existing bilateral commitment to aviation safety, is a key driver for both countries' economies, providing the ability to strengthen and expand their already strong trade and tourism links," say US and Australia regulators in a joint communique.

"Both countries are strong advocates of air service liberalization and with this shared goal clearly in mind, Mr Vaile and Ms Peters have agreed that their respective aviation officials will meet before the end of this year to commence discussions."