Virgin Blue teams up with Skywest on regional routes

Virgin Blue Holdings says it will lease up to 18 turbo prop aircraft and increase its exposure to the mining boom after signing a 10-year strategic alliance with Singapore-based regional operator Skywest Airlines.

The announcement completes the third phase of Virgin Blue's network review, the airline said yesterday.

The first turbo prop aircraft was due to arrive in mid-2011 and four were expected to be operating by the end of the year.

Virgin Blue chief executive John Borghetti said the airline was investing in a "substantial network in regional Australia".

The aircraft will fly to existing and new destinations around Australia and allow Virgin Blue to "access untapped opportunities in regional Australian markets, in particular the booming fly-in fly-out resource sector market", Borghetti said.

Specialist leasing company Aviation PLC will supply the new aircraft with an initial term of 10 years, Virgin Blue said.

"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," Skywest chairman Jeff Chatfield said in the Virgin Blue statement.

The two airlines have been partners since 2007, when Skywest joined Virgin Blue's frequent flyer programme, Velocity.

The partnership expanded in 2008 when Skywest and Virgin Blue announced a codesharing agreement over flights from Perth to some regional Western Australian destinations.

The pair signed a memorandum of understanding in July last year.

Virgin Blue, Australia's number two airline, already has alliances with Abu Dhabi-headquartered Etihad Airways and Air New Zealand.

Skywest's network is centred on Western Australia, with services also to Darwin and between Port Hedland and Bali.

- AAP