Virgin Australia to buy Skywest to beef up Perth business flights

Virgin Australia will purchase Perth-based regional airline Skywest as part of an airline land-grab today that also saw Virgin taking a controlling 60 percent interest in Tiger Airways Australia.

Skywest is a major player in the 'fly-in-fly-out' resources sector charter operations with flights to regional Western Australia, Darwin, as well as Melbourne and Denpasar.

The deal is valued at $47 million as a full buyout of Skywest shares, and is expected to be completed by March 2013.

Skywest will in essence become Virgin Australia's version of Qantas subsidiary QantasLink: carrying Virgin branding, but actually running as its own separate airline.

It's part of John Borghetti's new three-level choice for Australian business travellers: Qantas or Virgin, Jetstar or Tiger, QantasLink or Skywest.

Virgin Australia CEO John Borghetti said today that the deal "will enable us to fast-track our advancement in the high growth fly-in-fly out and regional markets, increasing competition in these important segments.

"We launched a regional partnership with Skywest in October 2011 and now we will be able to realise the full potential of the operation through developing a more integrated network, service and frequent flyer program," Borghetti explained.

The deal is conditional on approval from Australian and Singaporean regulators, as well as Skywest shareholders.

Related news: Singapore Airlines has also today taken a 10 percent stake in Virgin Australia.

For up-to-the-minute news on Virgin's acquisitions, follow Australian Business Traveller on Twitter: we're @AusBT.

John Walton

Aviation journalist and travel columnist John took his first long-haul flight when he was eight weeks old and hasn't looked back since. Well, except when facing rearwards in business class.