Virgin Blue and Skywest forge alliance

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Australia's Virgin Blue and Skywest Airlines have signed a 10-year alliance to create a regional network in Australia.

Skywest will operate up to 18 new turboprop aircraft in Virgin Blue livery to existing and new destinations around Australia, says Virgin Blue.

The airlines have not decided on the aircraft type, says a Virgin Blue spokeswoman. "They will however be aircraft with the latest technology," she adds.

The first aircraft will arrive in mid-2011, and four aircraft will be in operation by the end of this year. Details of the network and flights will be announced in the coming months, says Virgin Blue.

"The partnership will see Virgin Blue expand its reach throughout Australia and will allow us to access untapped opportunities in regional Australian markets, in particular the booming fly-in fly-out resource sector market," says Virgin Blue's CEO John Borghetti.

Virgin Blue and Skywest will codeshare on some sectors of each other's domestic networks. The two carriers already have an existing codeshare agreement in place.

"In addition to providing Skywest with access to Virgin Blue's extensive network, this major strategic initiative provides us with the opportunity to significantly grow our corporate travel offer for resource sector and charter clients across Australia and internationally," says Skywest's chairman Jeff Chatfield.

The turboprop aircraft will be leased from Avation, with an initial term of ten years.

"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 codeshare partner," adds Chatfield.

Skywest will also operate the aircraft on coastal networks in Western Australia, after receiving a licence from the authorities to operate to these destinations from Perth.