Malaysia, Indonesia and Thailand today inked a landmark agreement to harmonise aviation laws relating to AirAsia which will smooth the budget carrier's regional operations.

AirAsia's chief executive Tony Fernandes, who has urged the Association of Southeast Asian Nations (Asean) to speed up deregulation in the aviation industry in order to lower costs and spur growth, hailed the agreement.

"I am pleased that the regional cooperation has received full support from the Department of Civil Aviation of Malaysia, Thai Department of Civil Aviation and Directorate General of Air Communications (Thailand)," he said.

Fernandes has said that the 10-nation bloc must harmonise regulatory requirements if it wants to achieve its goal of having open skies, and called for a European-style joint aviation authority.

The Malaysia-based airline, which dominates the crowded Southeast Asian low-cost sector, has joint venture operations in Indonesia and Thailand.

Four key areas

Under the new agreement, to be implemented in November, are four key areas including standardising pilots' retirement age at 65. Currently it is set at 60 in Malaysia and Indonesia and 63 in Thailand.

The second allows pilots to certify the aircraft for flying and the third is to allow engineers in respective countries to certify one another's aircraft. Currently different rules apply in the three countries, potentially causing delays.

The fourth area provides for aircraft from Malaysia or Indonesia to be freely substituted in the case of a Thai AirAsia aircraft being grounded.

Transport Minister Chan Kong Choy said the "pragmatic approach and cooperation will not only assist the growth of the AirAsia group but more importantly spur the progressive growth of the aviation industry in the region."

Chan said separately today that Malaysia and Singapore are considering bringing forward an open-skies agreement due to be implemented in the region by 2008, which will allow unlimited capital-to-capital flights within Asean.