Australian transport group Patrick Corporation, headed by multi-millionaire Chris Corrigan, will pay A$260 million ($140 million) for a 50% stake in Sir Richard Branson's Virgin Blue. The low-fare airline says the investment will allow it to grow to a 50-aircraft fleet and gain a 50% domestic market share within five years.

Virgin Blue says: "Depending on capital requirements, which are yet to be determined, part of this payment may be for new capital for Virgin Blue and the balance as consideration for existing shares." Patrick will pay Branson a further consideration for its half share, dependent on the company meeting unspecified performance targets over the next three years.

The expanding airline, which operates 16 Boeing 737s with a further seven to be delivered this year, has already held talks with Boeing on accelerated fleet growth. Virgin Blue says the deal with Patrick will also allow it launch international services.

Patrick, which has shipping, rail and stevedoring interests, is also set to expand into air cargo, filling the vacuum left by the collapse of Ansett. Corrigan says Virgin Blue will become "a significant competitive force to Qantas".

Source: Flight International