The first of its kind, the multilateral agreement between Singapore, the United States, Brunei, Chile and New Zealand will hopefully increase competition and see better and cheaper flights between the five countries. The pact removes restrictions on when and where airlines from the five countries can fly, as well as the prices charged, on a multilateral basis. This means that Singapore Airlines, for instance, can operate flights between the US and Chile without first having to negotiate bilateral agreements, which are often cumbersome. Similarly, US airlines are free to fly between Singapore and New Zealand. The US had initiated discussions on the 'open skies' agreement last November with a view to penetrating the lucrative Asia-Pacific aviation market.
Analysts welcome the pact as historic in an industry that is traditionally protective.
Open skies agreements are usually signed between two countries only. Often, they lead to lower air fares and freight rates. Singapore already has bilateral pacts with the US, Brunei and New Zealand. Some see the latest multilateral agreement as a way for Singapore Airlines to stay viable should improved technology allow planes to skip Singapore as a stopover - the airlines can operate between two other countries without stopping here. Others believe it will put pressure on other nations in the region to open up their skies and join similar pacts.