The competition watchdog is set to approve an alliance between Virgin Australia and West Australian regional airline Skywest.
A draft decision made by the Australian Competition and Consumer Commission (ACCC) on Thursday proposed that the partnership be authorised.
The alliance would promote competition with Qantas and its affiliates by enabling Virgin Australia to offer an integrated package to corporate clients, such as mining companies with large fly-in-fly-out workforces, the ACCC said in a statement.
Further feedback would be sought from the two airlines and other industry members before a final decision is made, it said.