Australia has denied Singapore Airlines access to the lucrative route between Sydney and Los Angeles, despite extensive lobbying from Singapore.
Transport Minister Warren Truss said having Singapore fly the trans-Pacific route would bring only minor benefits to the Australian tourist industry.
And it could also have a negative impact on the economy, he claimed.
At present the lucrative route is flown only by the Australian national carrier Qantas and United Airlines of the US.
'National interest'
Qantas controls 75% of the market share on the Australia-US route, from which it derives around 15% of its net profit.
Singapore Airlines has been asking for 10 years for access to the route.
But Mr Truss said that while Australia viewed an "open skies" policy as a national goal, and was willing to negotiate access to the Pacific route, this would only happen "when it is in the national interest".
"In terms of the Singapore Airlines' request for access, the government has decided not to grant them access at the present time," he said.
"If access is negotiated in the future, it will be limited and it will be phased."
Ownership cap
He said a lengthy government review of aviation policy found the policy settings introduced in 1999 were appropriate.
Mr Truss added that the government would continue to offer unlimited access for airlines to all Australian airports other than the four main hubs of Sydney, Melbourne, Brisbane and Perth.
And he said the cap on foreign ownership of Qantas would remain at 49%.
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