Australian and US airlines will now be able to determine the frequency of their air services and the routes they wish to serve without government interference.

Qantas has welcomed a new open skies agreement between Australia and the United States, which is likely to increase competition on the trans-Pacific route.

The national carrier also announced that it would increase in March the number of services it runs between Australia and the US to 51 services a week from 48.

"We welcome the outcome," chief executive Geoff Dixon said of the new agreement.

"It brings opportunities for growth and competition.

"Importantly, it will assist the further development of Australia's aviation industry, as well as help increase trade and tourism with a major economic partner."

Qantas said code share connections with US partner airlines could be increased under the new arrangements.

Mr Dixon said Qantas was pleased to note the emphasis that the federal government had given to securing increased opportunities for Australian carriers.

"Further liberalisation of air services arrangements with a number of countries is needed if Australian carriers are to grow operations and match opportunities available to foreign competitors," he said.

Mr Dixon said Qantas has identified a number of markets where more open arrangements would be required if Qantas and low-cost subsidiary Jetstar were to fully implement their commercial plans.

Australia's leading travel agency, Flight Centre, said an open-skies agreement between Australia and the US is likely to spark an international airfare price war.

Managing director Graham Turner said travellers would benefit from the arrival of new carriers on Australia-US routes, with increased competition likely to spark a wave of airfare discounting.

Australia and the US on Friday finalised the long-awaited open skies agreement, which will allow vast expansion of air travel and competition on the busy trans-Pacific route.

Federal transport Minister Anthony Albanese said under previous arrangements, new airlines had only been allowed four services a week, effectively restricting competition.

Australian and US airlines would now able to determine the frequency of services routes without government interference.

Currently only Qantas and US-based United Airlines fly the lucrative route, with United operating 14 weekly services.

The new arrangements would enable Virgin Blue Holdings Ltd's V Australia to proceed with plans to introduce air services between Australia and the US later this year.

"This environment will deliver huge benefits and savings to travellers in both Australia and the United States," Mr Turner said.