Virgin Australia will invest $8 million in regional carrier Skywest Airlines as it moves to take advantage of the booming resource market.
The deal will give Virgin the equivalent of a 10 per cent stake in Perth-based Skywest, which operates a network of scheduled and chartered FIFO services serving the mining sector as well as Virgin Australia’s ATR 72 regional network. Earlier this year Virgin and Skywest also announced a codesharing alliance.
“This investment highlights the confidence that Virgin Australia has in the Skywest business and our ability to tap into future growth opportunities in the Australian regional market,” Skywest executive chairman Jeff Chatfield said in a statement released on Tuesday.
Virgin Australia CFO Sankar Narayan said the airline looked forward to a closer partnership with Skywest.
“We have grown our regional operations significantly since launching our regional network with Skywest in October 2011, with the commencement of new services to Emerald, Gladstone and Port Macquarie,” Narayan said. “These services have been highly popular with the flying public and are already among our best performing regional routes.”
Narayan said plans to increase Virgin’s fleet of ATR turboprops from four to 12 by the end of FY13 left “plenty of opportunity to further expand our regional footprint”.