31 January 2013 © David Eyre
As reported on AviationWA on 30 October 2012, Virgin Australia had made a $98.7 million takeover offer for WA-based regional and FIFO airline Skywest Airlines.
The Skywest takeover was subject to approval from the Australian Competition and Consumer Commission (ACCC), which on 31 January 2013 announced that it has given the go ahead.
The ACCC Chairman said that the takeover was unlikely to lead to a substantial lessening of competition, as the services that Virgin and Skywest supply are complementary, rather than competitive with each other. Only one route (Perth-Broome) overlaps.
Other regulatory approvals are yet to be obtained, from the Australian Foreign Investment Review Board, Singapore’s High Court, and the Securities Industry Council of Singapore. Skywest shareholders will also need to vote on the takeover offer. Subject to these approvals, it is expected that the acquisition will be completed by mid-2013.
This move will enable Virgin to directly compete with Qantas-owned subsidiaries QantasLink and Network Aviation in the FIFO and regional WA markets, in addition to services it already operates in its own right within regional WA.
Skywest will be re-branded Virgin Australia but will continue to operate under its air operator’s certificate with its own CEO and management team, based in Western Australia. Virgin Australia CEO said that Virgin will invest to support the growth of Skywest.
Skywest is currently owned by Singapore-based investment company CaptiveVision Capital Ltd and Virgin Australia Holdings (10% purchased on 10 April 2012).
Virgin and Skywest already had close links through code sharing and frequent flyer arrangements, and in 2011 Virgin Australia commenced a 10-year alliance with Skywest Airlines to operate ATR72 turboprops in Virgin Australia colours.