Brunei, Singapore and Thailand are negotiating a multilateral air services agreement that would give locally registered airlines unlimited rights for passenger flights.

Singapore's transport ministry hopes agreement can be reached around September. Early this year the three South-East Asian nations signed a multilateral open-skies pact on cargo flights, after which they started talks on a passenger agreement. It is expected an agreement will allow airlines from the three territories unlimited passenger flights between the states, although restrictions are likely to remain on fifth freedom, or beyond, services.

Singapore already has highly liberal bilateral air services agreements with Brunei and Thailand, but Brunei and Thailand have limits on passenger flights between them. Brunei and Singapore have long supported open-skies agreements, but Thailand has only recently started to show interest, in part because of the potential for growth in travel and tourism prompted by the emergence of low-fare airlines.

Thailand has seen the launch of two such carriers over the past half-year, namely Orient Thai subsidiary One-Two-Go and Thai AirAsia, a 49%-owned associate of Malaysia's AirAsia. Thai Airways International is, meanwhile, working to launch a low-fare carrier with partners to be known as Nok Air.

Singapore is also seeing new start-ups. Valuair was the first, having begun operations in May, although it is not regarded as a true low-cost carrier. Singapore Airlines is, meanwhile, working with foreign partners to establish low-cost Tiger Airways, while Qantas Airways is working with local partners to establish a still-unnamed new carrier. Many observers believe growth in the low-fare segment of the market will spur a further liberalisation of air services in the region.

Source: Airline Business