SYDNEY (AFP) - Virgin Australia on Wednesday announced that Singapore Airlines has agreed to buy a further 9.9 per cent stake in the company for A$122.4 million (S$155.78 million) as rivals to Qantas step up their game.
The Singapore flag carrier will purchase 255.5 million shares held by the Virgin Group at 48 cents each, taking its total holding in the Australian domestic airline to 19.9 percent, Virgin said in a notice to the market.
The purchase, which follows Singapore Airlines taking a 10 per cent stake in October last year, still needs the approval of Australia's Foreign Investment Review Board.
If it goes ahead, Singapore will become one of the top three shareholders along with Mr Richard Branson's Virgin Group and Air New Zealand.
Abu Dhabi-based airline Etihad also holds a significant share, giving Virgin Australia hefty financial clout to contend domestically with Qantas.
Australia has a lucrative domestic market and global airlines have been deepening ties with local carriers to access it.
Last year, Qantas and Emirates announced a major global alliance which opens up Qantas's domestic network of more than 50 destinations and nearly 5,000 flights per week to the Dubai-based airline.
Singapore Airlines is a key international competitor to Qantas.
The announcement comes a day after Australia's competition regulator approved Virgin Australia's purchase of a 60-per cent stake in low-cost rival Tiger Airways Australia, despite concerns about the market becoming a duopoly.