GROWTH opportunities for Australia’s tourism industry are set to increase following the settlement of a landmark new air services agreement between Australia and China.

Deputy Prime Minister and Minister for Infrastructure and Regional Development Warren Truss, along with Trade and Investment Minister Andrew Robb, who is responsible for tourism, today announced the conclusion of negotiations between the two countries.

“Making it possible for Asian markets to grow has been a key priority for the Abbott Government, and this new deal with China will allow Chinese airlines to almost triple their services to Australia over the next two years,” Mr Truss said.

“Under the new arrangements, Australian and Chinese airlines will be able to immediately operate up to 26,500 seats per week between Australia’s major gateway cities and Beijing, Shanghai and Guangzhou – an increase of 4,000 weekly seats or around 18% on these routes.

“A further 7,000 weekly seats to and from these destinations will be phased in over the next two years, to a total of 33,500 weekly seats.

“This opens up opportunities for Australian airlines to better serve the China market.”

Mr Robb said the new arrangements build on the success of the China-Australia Free Trade Agreement (ChAFTA) concluded recently with Beijing.

“Just as ChAFTA creates significant opportunities for Australian businesses in China, this new deal increases connectivity between our economies, particularly in tourism,” Mr Robb said.

“Last year, 100 million Chinese travelled abroad and this is set to double to some 200 million by 2020. Tripling aviation capacity from China into Australia over the next two years will ensure we are well placed to capture our share of this growth.”

Mr Robb said in 2013-14, nearly 760,000 Chinese travellers spent close to $5 billion in Australia, and with the hugely popular Chinese New Year around the corner, conclusion of the negotiations were most timely.

“China is our most valuable tourism export market. This agreement – along with the launch of the recent pilot program for online visa applications by Chinese visitors – means our tourism sector is well primed for 2015,” Mr Robb said.

Recognising the significance of emerging markets in China, Mr Truss said that, for the first time, the new arrangements provide a separate pool of capacity dedicated to cities in China other than Beijing, Shanghai and Guangzhou.

He noted that the capacity available for airports in China’s second and third tier cities is set at the same level as major Chinese gateway capacity, which will help accommodate the demands of these rapidly growing regions.

“Airlines can continue to offer unlimited passenger services between China and regional Australian ports, such as Cairns, Adelaide, Darwin and the Gold Coast, ensuring tourism operators in our rural and regional areas have access to the lucrative Chinese tourism market,” Mr Truss said.

“Removal of unnecessary regulation has also been a priority for the Government, and Chinese agreement to remove any requirements for government approval of airfares in China will further reduce regulatory burdens on Australian airlines doing business there.

“The Australian Government is committed to ensuring that we have the aviation capacity necessary to meet future demand into and out of foreign markets and recognises the potential of Australia as a prime tourism destination within the Asia-Pacific region.”

When operating services to/from all cities in Australia other than the Australian Major Gateways (Sydney, Melbourne, Brisbane and Perth), airlines of both sides enjoy open capacity.

When operating services between the Chinese Major Gateways (Beijing, Shanghai, Guangzhou) and the Australian Major Gateways, airlines of both sides may operate the following:

  • with immediate effect, 26,500 seats each way each week;
  • from October 2015, 30,500 seats each way each week; and
  • from October 2016, 33,500 seats each way each week.

When operating services between all cities in China other than the Chinese Major Gateways and the Australian Major Gateways, airlines of both sides may operate the following:

  • with immediate effect, 26,500 seats each way each week;
  • from October 2015, 30,500 seats each way each week; and
  • from October 2016, 33,500 seats each way each week.

In addition, airlines of both countries linking an Australian Major Gateway and another city in Australia as part of a multi-stop international service, may operate an extra 2,500 seats each way each week.

A phased expansion of traffic rights at beyond and intermediate points has also been negotiated. By October 2016, airlines of each side will be able to access an additional three beyond points of choice (except for points in North America) and an additional six intermediate points.

These rights provide access to Australian airlines to fly beyond China to a variety of locations, including Europe, and will offer greater flexibility for airlines flying to China via intermediate points in Asia.

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