It means Singapore Airlines, Etihad and Air New Zealand have a combined stake of more than 38 per cent in Australia’s second-largest airline. Together with Sir Richard Branson’s cornerstone stake, almost 65 per cent of Virgin’s shares are now in the hands of foreign investors, a scenario that only became possible earlier this year when the Australian airline rejigged its ownership structure much to the chagrin of Qantas. Two-brand strategy for domestic market Virgin boss John Borghetti, a 36-year veteran of Qantas, has also taken another leaf out of his old workshop’s book and created his own two-brand strategy in the Australian domestic market. Just last week a sheepish Borghetti was emphasising at an investor gathering in Sydney that Virgin was no longer playing in the budget sandpit occupied by Tiger and Jetstar.

That’s because Virgin had positioned itself as an upmarket rival to Qantas. But the deal Borghetti announced today to buy a controlling stake in Tiger’s Australian operations for $35 million means he has created his own dual-brand strategy aimed at countering Qantas and Jetstar. Virgin and the Singapore Airlines-backed Tiger Airways will inject up to $62.5 million into the budget airline in Australia. In itself, the rebirth of Tiger’s Australian operations from what many thought was nigh on impossible following its six-week forced grounding last year is remarkable. Now, Borghetti and his Singaporean bedfellows plan to boost the size of Tiger's Australian fleet from 11 single-aisle A320 to 35 by 2018, creating a major rival to Jetstar. Then there’s the other rabbit Borghetti has pulled out of his hat today by taking full control of Western Australia’s Skywest Airlines, which is targeting the fly-in fly-out market in the resource-rich west.

In all, the three deals will expand Virgin from 108 to 139 planes and more than 9000 employees. Relaxation of Qantas Sale Act? Of course, Borghetti’s game play announced today will give Qantas ammunition in Canberra to argue for a relaxation of the Qantas Sale Act, which limits foreign investment in Australia’s largest airline. Qantas has become increasingly edgy about a large pact of airlines looming on its doorstep. Airlines such as Etihad are deep-pocketed and have shown a willingness to expand aggressively despite tough conditions. It will also strengthen Qantas’s case for the competition regulator to approve its alliance with Emirates.

For Borghetti, there are still a few hurdles to jump.

While the share placement to Singapore Airlines has received foreign-investment approval, Virgin will need regulatory approval for taking control of both Tiger Australia and Skywest. Loading The possibility of grand airline alliances in our neck of the woods has been exercising minds since Virgin rejigged its ownership structure early this year. They’ve now become reality.