Skywest Now Part of Virgin Australia

17th Apr 2013

In its bid to become the largest airline in the continent, Virgin Australia successfully acquired Skywest, a regional airline which operates mainly in Western Australia, and a couple of cities outside the state such as Darwin, Northern Territory and Melbourne, Victoria.

The latest acquisition by Virgin Australia of a major regional airline is a major step to push itself ahead of the competition over its biggest rival, Qantas. The acquisition was approved early this year by Australian Competition and Consumer Commission (ACCC), Australia's competition watchdog.

The recent buyout allowed Virgin to rebrand Skywest in due time. While Virgin takes on Qantas, Skywest will pit against QantasLink, Qantas' own regional operator. Skywest shall compete directly with QantasLink by flying to destinations where the latter serves.

The planned acquisition was announced publicly in October last year by John Borghetti, Virgin Australia's Chief Executive Officer. The two airlines already forged partnership way back in 2011 through flight codesharing.

The deal was completed in late March this year when Singapore's High Court approved Virgin's proposal to purchase Skywest, a Perth-based Singaporean-owned regional airline. The price tag of the acquisition was rumored to be around $47 million through stakes purchase by Virgin.

Skywest might have carried the Virgin brand but in essence, it still operates as a separate company apart from the mother unit.

Aside from the recent buyout of Skywest, Virgin also intends to acquire a controlling stake in Tiger Australia, another Singaporean-owned airline. If successful, Tiger Australia will take on Qantas' Jetstar as its direct competitor.

Borghetti has a plan already in place for Tiger once his proposal is approved. Virgin Australia will invest substantially, to the tune of $65 million, to develop Tiger by expanding its fleet and route network.

Virgin Australia has reiterated that all its acquisitions will retain their autonomy as separate companies, nor code share their flights.