Morocco, expecting to boost tourist arrivals by 1 million annually over the next five years, initialed a deal on Wednesday with the European Union to expand aviation services and energize airline competition, government officials said.

The so-called "open skies" agreement, to be effective next year after parliamentary ratification, came after negotiations between the European bloc and Rabat. The initialing ceremony was in Marrakech.

Transport ministers from the EU are to meet their counterparts from the southern Mediterranean region in Marrakech on Thursday to expand cooperation.

Morocco had separate aviation accords with individual EU states and sees the new agreement with the bloc -- its main trade and tourism market -- as a way to double the number of tourist arrivals to 10 million by 2010.

Without such a deal, the government would have had to invest 30 billion dirhams (USD$3.29 billion) to expand its Royal Air Maroc airline's fleet by 60 new planes over the next five years to fly the expected additional tourists, the officials added.

They said the "open skies" deal, which ends restrictions and limits on flights and national airlines operating between the EU and Morocco, will help Rabat bring the additional travelers it needs to boost its tourism industry.

The government has a development plan to expand and upgrade roads and other basic infrastructure in tourist zones, where new hotels and other facilities will be built to accommodate the expected rising number of tourists.

It sees the new aviation agreement -- which will open its skies to all EU airlines, including no-frills airlines -- as fitting in the country's tourism development strategy, which aims at making the industry as an economic growth vehicle.

"To bring the 10 million tourists Morocco expects in 2010, the country has to increase air passengers to 15 million per year from 7 million currently," Karim Ghellab, transport minister, was quoted on Wednesday by the main financial daily L'Economiste as saying.

The newspaper said the government sees about two-thirds of the air passengers as tourists.

The main worry would be the impact of the heightened competition on the country's flag carrier Royal Air Maroc.

But airline chief executive Mohamed Berrada, a former finance minister, told the state news agency MAP that the agreement, effective early next year, will spawn healthy competition for efficient companies.

"The competition will not play out on Morocco only. That competition will play out in the EU as well. For us, competition is a factor of progress," he said.

(Reuters)