Qatar Airways has been awardedrights to operate a daily flight toAustralia’s second largest city of Melbourne,Transport Minister Mark Vailesaid.

Under the new air services arrangementwith Qatar, Qatar Airways will alsohave the right to operate a second dailyflight to another Australian city from2008 as Australia increases access rightsfor Middle East airlines.

Australian airlines will also be giventhe same increased access to Qatar, animportant Middle East aviation hub,”Vaile said.

“The countries of the Gulf Cooperation Council, including Qatar, areimportant trade partners for Australia.These new air services arrangementswill benefit all Australians, by growingtrade and tourism links,” Vaile said ina statement.

Qatar Airways rival Emirates, thelargest Arab airline, is expanding routesto Australia and Abu Dhabi-based EtihadAirways will also launch servicesto Australia.

The expansion of services by foreignairlines to Australia is expected to increasecompetition on routes betweenAustralia and Europe for take-overtarget Qantas Airways.

“Around 20 airlines currently alreadyfly these routes over a range ofhubs, and with yet more capacity cominginto the market, Qantas will haveno option but to achieve further costsavings if it is to remain competitive,”Qantas chief executive Geoff Dixonsaid in a statement.