ACCC gives tick to Virgin-Skywest alliance

The Australian Competition and Consumer Commission has authorised an alliance between Virgin and Skywest Airlines.

Skywest operates intra-state and charter flights to regional towns in Western Australia from Perth to Port Headland, Exmouth, Kalgoorlie and other mining areas, as well as Perth-Darwin and Perth -Melbourne.

“The Corporate Alliance will allow the airlines to offer bundled air passenger transport services to corporate customers who seek an integrated suite of charter, domestic and international services, such as mining companies with large fly-in-fly-out workforces,” the regulator said in a statement.

ACCC chairman Rod Sims said the alliance will promote competition by enabling Virgin and Skywest to offer a more extensive integrated air service package to corporate customers in competition with Qantas and its affiliates.

“This is likely to result in public benefits such as enhanced products and services available to corporate customers, increased choice of integrated service providers and potentially lower prices due to closer competition.”

The ACCC granted Virgin and Skywest interim authorisation on January 25, 2012, allowing them to set up the corporate alliance and begin negotiating and tendering for corporate contracts.

The competition watchdog says the agreement will be valid for an initial five year period.