Virgin now has approval from the competition regulator to proceed with its $100 million take-over of Perth-based regional airline Skywest Airlines, giving it a chance to cash in on Western Australia’s mining boom.
However, Virgin still requires approval from the Foreign Investment Review Board and its shareholders to complete the purchase.
Chief executive John Borghetti said the takeover would help business and tourism in Western Australia with plans to open up new routes.
“This acquisition will enable us to accelerate our expansion in the high growth fly-in-fly-out (FIFO) and regional markets, increasing competition in these important segments and bringing new benefits to customers,’’ he said in a statement.
Virgin plans to rebrand Skywest’s fleet of 28 planes and will keep Skywest’s staff, management team and airline operating certificate, a spokeswoman said.
The Australian Competition and Consumer Commission noted that Virgin had ‘‘very limited charter offer’’ apart from an existing alliance with Skywest and that the two airline’s domestic and international routes were complementary.
And that competition would remain strong because Qantas and other airlines operated on the same routes.
‘‘The ACCC ’s view is that this acquisition is unlikely to lead to a substantial lessening of competition in any relevant market, primarily because the direct overlap between Virgin Australia and Skywest’s services is limited to a single route between Perth and Broome,’’ chairman of the ACCC, Rod Sims, said in a statement.
It took the ACCC three months to approve the Virgin Skywest merger.
Meanwhile, Qantas has been selling tickets ‘‘pending regulatory approval’’ on Emirates flights departing after March 31 after receiving interim authorisation from the ACCC.
Qantas was anxious it could miss out on bookings for flights to the northern hemisphere’s summer if it had to wait for the ACCC’s final decision on the proposed merger, according to a letter from its legal department to the ACCC. The final decision was expected in April.
‘‘Any delay in agreeing and commencing sale of join fare products puts the applicants (in particular Qantas) at a severe competitive disadvantage during a peak selling period, with a substantial amount of revenue at risk particularly where corporates and industry clients will be looking for some certainty allowing them to plan their activity.’’
If the ACCC blocks the merger Qantas has promised to re-accommodate travellers on ‘‘an equivalent flight at no additional charge to the passenger’’ or offer a full refund.
And a pre-decision conference will be held in Sydney on Friday following a request by the Transport Workers Union.