The market for regional air services in Western Australia is continuing to grow as both Qantas and Virgin Australia announce further investment in the state.
Virgin Australia is to invest $8 million in Skywest Airlines in return for a 10 per cent stake in the company. Virgin chief financial officer Sankar Narayan said the decision to invest was prompted by anticipation of further growth within the regional WA market.
Skywest steadily increased its capacity to resources hubs Geraldton and Kalgoorlie last year, and began operating integrated services with Virgin in October.
Executive chairman Jeff Chatfield said the company expected regional demand to increase further. Revenue from regional charter and fly-in, fly-out services was expected to overtake revenue gained from public transport by the end of 2013.
Virgin’s investment in Skywest comes after the company lost a contract to provide FIFO services to Rio Tinto’s Argyle diamond mine. Alliance Airlines will take over operation of the contract on Monday.
Meanwhile, Qantas has announced it is launching a direct service between Sydney and Newman to meet demand from both recreational passengers and the resources sector.
The once-weekly service will launch on May 15 and adds to the carrier’s 29 round-trip services operated between Perth and Newman each week.
Qantas subsidiary Network Aviation, which is based in WA, has also been investing in regional services with an increase to its fleet.
