Virgin Australia and Skywest have received government approval for a five-year 'corporate alliance' in a team-up to take on Qantas for Australia's corporate travellers, especially the mining and resources sector.
The ACCC (Australian Competition and Consumer Commission) today gave the green light to the alliance, for which it issued a draft approval in March.
"The corporate alliance will allow the airlines to offer bundled air passengers 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 ACCC said in a statement.
ACCC Chairman Rod Sims believes the partnership "will promote competition by enabling Virgin Australia 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 to closer competition."
A more solid result of the tie-up is that members of Virgin Australia's Velocity frequent flyer programme will now be able to earn points and status credits on Skywest’s charter services, as well as enjoy other status-related perks such as preferred seating, priority check-in and access to Virgin Australia lounges – although Virgin has yet to advise when all this will take effect.
Last month saw Virgin Australia take a 10% stake in regional airline Skywest to boost its regional flights and take on Qantas' regional QantasLink operation.
The $8m investment upgrades the existing Virgin-Skywest partnership and "highlights our belief in the growth potential of the Australian regional market" says Virgin Australia Chief Financial Officer Sankar Narayan.
Narayan reports that Virgin's Skywest-operated services to Emerald, Gladstone and Port Macquarie "have been highly popular with the flying public and are already among our best performing regional routes".
Skywest will bolster its current fleet of four new ATR-72 'turboprop' (turbine-driven propeller) aircraft "to 12 by the end of the 2013 financial year", Narayan says, providing "plenty of opportunity to further expand our regional footprint."