SYDNEY (REUTERS) - Australia's Foreign Investment Review Board has approved Virgin Australia Holdings Ltd's plan to take control of loss-making rival Tiger Australia, setting up a battle for domestic budget air travellers with Qantas Airways Ltd's Jetstar unit.
Virgin, Australia's No. 2 carrier, in October announced plans to buy 60 per cent of Tiger Australia for A$35 million (S$43 million) and invest a further A$62.5 million to increase the fleet size to 35 aircraft from 11 by 2018.
Australia's airline industry has been a battleground for global airlines seeking partnerships in recent months to secure domestic passengers to feed into their global and regional networks.
Qantas has established a wide-ranging alliance with Emirates Airlines, while Singapore Airlines Ltd (SIA) announced last month it was increasing its stake in Virgin Australia to 19.9 per cent.
The Virgin-Tiger Australia deal, already approved by the country's competition regulator, is expected to be completed by mid-July, Virgin Australia said in a statement.