WASHINGTON - THE United States and Australia on Monday inked an open skies aviation agreement eliminating restrictions on air travel between the two allies that would lead to lower fares, officials said.

Visiting Australian Prime Minister Kevin Rudd witnessed the signing of the agreement at the US Department of Transport in Washington, hailing it as a 'new era' in trans-Pacific aviation links.

'Its aim is to make it easier and cheaper for even more people to make the air journey across the Pacific to add more strands to our ties,' he said.

Even before the pact was signed, Virgin Blue Holdings Ltd, the Australian low-cost airliner partially owned by British tycoon Richard Branson, said its long-haul international carrier, V Australia, would launch non-stop services between Australia and Los Angeles in December.

The accord breaks the longstanding monopoly of the direct route enjoyed by US carrier United Airlines and Australia's Qantas Airways.

V Australia will launch ten new round trips from Los Angeles to Australia and 'pump almost one-and-a-half billion dollars into LA's economy with the stroke of a pen,' said US Transportation Secretary Mary Peters as she signed the agreement with Australia's envoy to Washington Dennis Richardson.

'Eliminating restrictions on US-Australia air services means lower fares, more convenient service, and more opportunity for travellers, commerce, and carriers to thrive,' she said.

The Sydney-Los Angeles flight corridor is regarded by the Australian government as a key national asset and Canberra has repeatedly rebuffed Singapore Airline's decade-long campaign for access to the route.

The United States has concluded open skies agreements with 90 countries and territories. -- AFP