Virgin Australia's proposed acquisition of regional carrier Skywest has taken a significant step towards completion as the competition regulator today confirmed it will not oppose the takeover.
The Australian Consumer and Competition Commission (ACCC) ruled there was unlikely to be any "substantial lessening" of competition as a result of the deal, mainly because the two carriers only operate one overlapping route, between Perth and Broome.
ACCC chairman Rod Sims said the market had been "broadly supportive" of the proposed acquisition.
"The services that Virgin and Skywest supply are seen as largely complementary, rather than competitive with each other," he said.
Virgin chief executive John Borghetti welcomed the ACCC's clearance as an "important step" in the completion of the deal which will see Skywest take on the Virgin brand but retain its current Air Operator's Certificate and its own management team based in Western Australia.
"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.
"It will also be very positive for business and tourism, particularly in Western Australia and regional Australia, as we will invest to support the growth of Skywest."
The transaction is still pending approval from a number of other authorities including the Foreign Investment Review Board, Skywest shareholders and the Singapore High Court.
Meanwhile, the ACCC's decision regarding Virgin's proposed acquisition of a 60% stake in Tiger Australia is expected on February 7.
