Virgin Australia, the second largest airline company in Australia, on Tuesday announced that it has entered into an agreement to purchase a 60 percent stake in Tiger Australia from Tiger Airways for 35 million AU dollars (36. 19 million U.S. dollars).

Virgin said Tiger Airways and Virgin Australia have committed to invest up to 62.5 million AU dollars (64.62 million U.S. dollars) in Tiger Australia to increase its fleet from 11 to up to 35 aircraft by 2018.

Virgin Australia Chief Executive Officer John Borghetti said the deal would enable Virgin Australia to access the budget market and allow Tiger Australia to expedite its growth.

"By partnering with Tiger Airways, we can use our expertise to leverage Tiger Australia's competitive cost base and build a sustainable budget carrier," he said in a statement.

Tiger Airways Chief Executive Koay Peng Yen said the deal was a significant step forward for the company.

"The joint venture will bring about a stronger and more competitive Tiger Australia, and allow us to deploy more capacity and attractive budget offerings to our customers," he said in a statement.

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