Qatar Airways given Australian air rights

CANBERRA, Mar 16 (Reuters) Middle East airline Qatar Airways has been awarded rights to operate a daily flight to Australia's second largest city of Melbourne, Transport Minister Mark Vaile said on Friday.

Vaile said under the new air services arrangement with Qatar, Qatar Airways will also have the right to operate a second daily flight to another Australian city from 2008 as Australia increases access rights for Middle East airlines.

Australian airlines will also be given the same increased access to Qatar, an important Middle East aviation hub,'' Vaile said.

''The countries of the Gulf Cooperation Council, including Qatar, are important trade partners for Australia. These new air services arrangements will benefit all Australians, by growing trade and tourism links,'' Vaile said in a statement.

Qatar Airways rival Emirates, the largest Arab airline, is expanding routes to Australia and Abu Dhabi-based Etihad Airways will also launch services to Australia later this month.

The expansion of services by foreign airlines to Australia is expected to increase competition on routes between Australia and Europe for takeover target Qantas Airways.

''Around 20 airlines currently already fly these routes over a range of hubs, and with yet more capacity coming into the market, Qantas will have no option but to achieve further cost savings if it is to remain competitive,'' Qantas Chief Executive Geoff Dixon said in a statement.

Qantas' low-cost subsidiary Jetstar is expanding in Asia, while Australia's Virgin Blue wants to launch long-haul flights to the United States next year.

Singapore's Tiger Airways plans to launch a third domestic carrier in Australia later this year.

REUTERS SHB KP1055