The agreement is anticipated to improve market access for airlines and provide travellers with better connectivity and more choice as well as lower fares.
This new agreement is expected to bring an additional 800 thousand passengers over a five-year period.
It is estimated that the agreement could generate 2.7 percent GDP growth from travel and tourism, and increase annual traffic by up to 13 percent per year.
The agreement will also establish a common regulatory framework, for example, in the fields of aviation safety and security.
After the initialling of the agreement, both parties agreed to move to signature as soon as possible and following their respective internal procedures.