Tuesday, February 12, 2013

ACCC Approves Virgin Australia Acquisition of Skywest Airlines

In late January, The Australian Competition and Consumer Commission (ACCC) gave Virgin Australia approval for their takeover of Australian regional operator Skywest Airlines.

The ACCC cleared the deal, saying it was unlikely to lead to a substantial lessening of competition, with the market reportedly giving broad support of the proposed acquisition.

The move will see Skywest Airlines rebranded as Virgin Australia, and take on Qantas' own regional operation, QantasLink, flying secondary routes including the resources sector and charter services.

Skywest Airlines is based in Perth, with the bulk of their operations to the major mining regions of Western Australia.  They also have a link to South Australia, and also operat the Virgin Australia ATR fleet on the East coast.

As one other well known aviation website commented:  "This can only be good for the airline as it will expose them to the lucrative mining contracts that Skywest hold in Western Australia with stable financial backing also giving them an edge to challenge for more contracts through out all the resource rich areas of Australia".

Meanwhile, last week the ACCC released a Statement of Issues in relation to Virgin Australia's proposed acquisition of 60% of the existing shares in Tiger Airways Australia. Virgin Australia is in the process of reviewing the document and preparing its response, believing strongly that the proposed acquisition will increase competition in the market to the benefit of Australian consumers.

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