Virgin Australia moves to integrate Skywest and challenge Qantas’ regional domination

Regional Australia has become the new competitive focus for domestic carriers in the wake of Virgin Australia's acquisition of Skywest in Western Australia and moves by Qantas to firm up its position in the East.

Skywest has provided Virgin Australia with a much needed boost to its regional network allowing it to better compete with Qantas. Regional traffic is growing but Virgin Australia's efforts to enter some markets are being hampered by regulatory restrictions on many routes in the interest of service stability. Virgin Australia has already intimated that it could move its headquarters from Brisbane in frustration at a decision to delay tenders for regional Queensland routes until 2014.

Qantas is responding to the renewed threat of increased competition on its regional network, having added another four Bombardier Q400 turboprops to its fleet. It will take delivery of more regional aircraft in 2H2013, including another five Boeing 717s, to bolster capacity.