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Virgin Australia extends Alliance wet-lease deal

Alliance Airlines will continue to operate aircraft on behalf of Virgin Australia until the end of 2021.

Under the expanded agreement, Alliance will continue to operate its Fokker 100 and 70 jets on a number of regional routes for Virgin, while it will also start to operate international services for the larger carrier.

While the carrier did not identify which international routes will be flown by Alliance aircraft, FlightGlobal schedules data shows that the smaller carrier is set to take over operating the Brisbane-Port Moresby route later this month.

Alliance already operates a number of wet-lease and codeshare services on behalf of Virgin on its domestic network, mostly from Brisbane to regional destinations in Queensland and northern New South Wales.

“Since the signing of our long-term strategic partnership with the Virgin Australia Group in August 2016 both parties have benefitted through the provision of a range of services including contracted wet-lease services,” says Alliance chief executive Lee Schofield.

The deal comes a fortnight after Qantas acquired a 19.9% stake in Alliance, and signalled its intent to apply for regulatory clearance to lift its stake in the charter and wet-lease carrier, and eventually take control.

Virgin chief executive John Borghetti said on 13 February that Virgin’s relationship with Alliance remains strong, but flagged that if Qantas was to gain control of Alliance, it would likely lessen competition on regional routes, thus driving up airfares for passengers.

“I think the bigger issue here for Australia in general is a ‘watch out’ in terms of diminishing competition in regional ports,” he said. “But as far as Alliance arrangements that we have they are strong, they are contracted for the long term.”

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