The acquisition comes a day after Virgin received competition regulator approval to buy a controlling stake in Tiger Australia from Singapore Airlines’ budget associate, Tiger Airways Holdings Ltd.

Singapore Airlines, which is majority owned by the Singapore government, paid 48¢ a share in Virgin Australia. Virgin shares on Wednesday traded 0.5¢ higher at 46¢.

Singapore Airlines recently sold a 49 per cent stake in Virgin Atlantic to Delta Airlines because synergies it hoped for had not materialised, a Singapore Airlines spokeswoman said. She added the airline had no plans ”at this point” to increase its stake in Virgin Australia beyond 19.9 per cent.

”Our partnership with Virgin Australia has been going from strength to strength, offering a wide range of consumer benefits,” Singapore Airlines chief executive, Goh Choon Phong, said.

”Increasing our stake in Virgin Australia is another example of Singapore Airlines’ deep commitment to the important Australian market.

”It also demonstrates our support for the ongoing transformation of Virgin Australia, which has created a more competitive aviation market in Australia.”

A spokeswoman for Air New Zealand said Singapore Airlines’ increased investment was not unexpected.

”Clearly Singapore Airlines sees the value that we see in Virgin Australia. We are complementary shareholders with no direct overlap in the markets we fly,” the spokeswoman said.

Analysts said the deal moved more of the voting power into the hands of the ”strategic operating partners”.

Macquarie Equities was upbeat about the acquisition.

”At this point there is no talk of a takeover from any of the parties. However, the interest from the partners does confirm the strength of Virgin Australia’s virtual international network going forward, as it attempts to compete effectively with Qantas’ new reach given the Emirates deal,” Macquarie said in a note to clients.

The transaction has provided a windfall to Mr Branson. Virgin Group has put about $50 million into Virgin Australia since 1999.

In 14 years, and thanks to Ansett’s collapse, it has been able to extract about $1.1 billion from the investment and still keeps a $148 million stake in the airline.

By Lucy Battersby