Canada and New Zealand have wrapped up an open-skies agreement to allow each other's airlines to operate freely in their partner's markets.

"I am pleased with the new air transport agreement with New Zealand, which is in line with Canada's Blue Sky international air transportation policy," said Canadian Transport Minister Lawrence Cannon.

"This agreement marks another step forward in providing a greater range of options for Canadian travellers, shippers and businesses."

The accord paves the way for air carriers from either country to operate passenger and all-cargo scheduled flights to any of the other country's airports at any frequency, reported AFP.

Canadian and New Zealand airlines will also be allowed to pick up passengers and cargo in each other's territory and continue to a third country, provided it is part of a service to or from their home country.

Canada and New Zealand last signed an aviation agreement in 1985, the report added.