Brunei, Chile, New Zealand, Singapore and the USA have signed the first multilateral air services agreement, promising to ease restrictions on flights between and beyond the member countries, as well as on airline ownership provisions.

The agreement, promoted by the USA, was first initialled late last year during the Asia-Pacific Economic Co-operation (APEC) meeting in Brunei. However, details were only firmed up in Washing-ton in May after frantic negotiations on ownership provisions, which had threatened to derail the entire deal.

The final agreement ran as planned, however, and came with a "protocol" signed by New Zealand, Singapore and Brunei, allowing for domestic operations by foreign carriers as extensions of international flights. Both the USA and Chile refused to sign the protocol. Singapore Airlines won the right to operate limited domestic flights in New Zealand under the deal.

A senior New Zealand Government official says the protocol was proposed by New Zealand as an extension of existing rights. It already officially allowed Brunei-registered airlines to operate domestic services as part of a bilateral agreement the two signed in 1998. "We didn't want to step back from that in the multilateral agreement," he says. "The Americans agreed to move on ownership and control restrictions but we didn't get them to budge on cabotage and seventh freedom."

New Zealand is arguably the most aggressive in calling for a global easing of restrictions on air service agreements. Apart from Brunei and Singapore, it has signed provisions allowing Irish and German carriers to operate domestically as extensions of international flights. While they are for the most part symbolic, the provisions "are a step forward", says the official. Australian carriers already have full rights to operate domestically in New Zealand.

The signatories to the multilateral accord are already calling for other countries to join them.

Source: Airline Business