Virgin Blue and Skywest sign 10 year strategic alliance to create regional network
10-Jan-2011 Virgin Blue Group andSkywest airlines today signeda 10 year strategic allianceto service regional Australiawith Skywest operating up to 18 new Virgin Blue branded turbo prop aircraft to a number of existing and new destinations around Australia.
The agreement will see Virgin Blue andSkywest codeshare on a number of sectors of each other's domestic networks and allows Virgin Blue and Skywest customers to earn and redeem Velocity reward pointson each other's networks.
Virgin Blue Group of Airlines Chief Executive Officer and Managing Director John Borghetti said: "By partnering with the preeminent regional airline in Australia, VirginBlueis investing inbuilding a substantial network in regional Australia and strengthening its domestic network. This alliance will significantly benefit regional Australiaas well as being a win-win for Skywest and Virgin Blue.
"The combined strength of our networks, along with the additional capacity we will deliver with new aircraft, will providetravellers withmore frequent flights, better schedules and competitive fares. The partnership will see Virgin Blue expand its reach throughout regional Australia and will allow us to access untapped opportunities in regional Australian markets, in particular the booming fly-in fly-out resource sector market.
"The first aircraft will arrive mid 2011 with four Virgin Blue branded aircraft in operation by the end of the year. These modern aircraft will have excellentfuel efficiencies, allowing us to keep airfares low for our customers."
The announcement today completes the third phase of the Virgin Blue Group's network review which aims tostrengthen the domestic network, increaseprofitability and providemore choice for customers.
Skywest Chairman Jeff Chatfield said: "Inaddition to providingSkywest with access to Virgin Blue's extensive network, this major strategic initiative provides us with the opportunity to significantly grow our corporate travel offer forresource sector and charter clients across Australia and internationally.
"The leasing arrangement means that Skywest will not be exposed to the capital investment of owning the aircraft and will be a service provider and code-share partner."
The new aircraft fleet will be leased fromspecialist leasing company Avation PLC (LSE: AVAP), with an initial term of tenyears.
Skywest is also planning to use a new fleet of the sameaircraft on coastal networks inWestern Australia, havingbeenrecently preferred by the Western Australian Government for a 5 yearexclusive license on certain coastalports of Western Australia to and from Perth.
Details of the network and flight schedule will be announced in coming months.