Competition watchdog clears Virgin’s tilt at Skywest
Virgin Australia has cleared another hurdle in its bid to acquire 100% of Skywest Airlines.
Under an agreement approved by the Australian Competition and Consumer Commission (ACCC), Skywest would become part of the Virgin Australia brand but would continue to operate under its current Air Operator’s Certificate (AOC) with its own management team, based in Western Australia.
Virgin Australia sees the deal as a means of fast-tracking its growth in regional Australia and developing a more integrated network, service and frequent flyer programme.
Last October, Virgin Australia announced its bid for Skywest, which is incorporated in Singapore, and a 60% buy-up of budget carrier, Tiger Airways, for AUD35 million.
The ACCC said it had considered competition issues involving services offered by Qantas and other regional airlines operating in Western Australia, including on-flights between Perth and Broome as well as charter services.
ACCC chairman Rod Sims said: “The services that Virgin and Skywest supply are seen as largely complementary, rather than competitive with each other.”
The ACCC has not yet made a decision on Virgin’s plan to buy a major stake in Tiger, saying it expected to make an announcement on February 7.
The proposed transaction still remains subject to certain conditions and approvals from the Foreign Investment Review Board, Skywest shareholders and the Singapore High Court.
Ian Jarrett
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