On April 29, the European Union (EU) and Australia signed an aviation agreement allowing European airlines to fly between any EU member state and Australia.

"This will pave the way for a comprehensive aviation agreement involving cooperation in key aviation areas such as competition, safety and the environment," said Jacques Barrot, vice president of the European Commission in charge of transport, describing it as an important step in the EU's air transport relations with Australia.

The agreement removes nationality restrictions in the bilateral air services agreements between EU member states and Australia and therefore allows any EU airline to operate flights between any EU country where it is established and Australia.

"This agreement acknowledges the existence of the European single market for air transport in the relations between the EU and Australia," the Commission said in a statement, adding airlines in the EU are not any longer national airlines but EU airlines under the agreement.

The EU has negotiated such an agreement with over 30 countries worldwide in a bid to remove the nationality restrictions contained in bilateral air services deals signed by each member state and a third country.

An "open sky" deal with the United States, which entered into force last month, also includes removal of the nationality restrictions.

The Commission said with more than four million annual passengers traveling between the EU and Australia, air transport relations with Australia are of major economic importance for the 27-nation bloc.

However, the agreement signed on April 29 was considered only an important first step in the aviation relations between the EU and Australia.

The Commission proposed in September 2005 to open broader aviation negotiations with Australia, and the proposal is currently under discussion by EU governments.

The broader negotiations would ensure market opening and regulatory convergence.