KUALA LUMPUR, Malaysia (AP) -- Billionaire Richard Branson's Virgin Group on Friday purchased a 20 percent stake in Malaysia's long-haul budget carrier AirAsia X, in an alliance that could transform the face of Asian aviation.

Virgin's purchase of the stake in Fly Asian Xpress (FAX), operator of the new airline, was announced in a company statement and by company officials.

They did not say how much the stake is worth. FAX executives had told Dow Jones Newswires that the 20 percent stake was expected to cost Virgin some US$7.2 million (?5.24 million).

FAX is owned by the founder of the region's largest low-cost carrier AirAsia.

"We believe that this partnership whereby Virgin will take a 20 percent stake will be a sound and successful investment," said Kalimullah Hassan, chairman of AirAsia X.

AirAsia X has been granted rights to fly to Stansted airport near London and to Australia's Gold Coast, with first flights to Australia to begin in late September or early October, the statement said.

Analysts said the alliance will be a big financial boost to FAX as it seeks funding for 15 Airbus A330s that it has ordered.

Virgin's investment in Malaysia also underscores Branson's confidence in Asia's booming low-cost airline business and formally link Asia's leading budget airline with one of Europe's key players.

In Asia, Virgin already owns 25 percent of Australian airline Virgin Blue, which calls itself a low-fare carrier but offers services that a typical no-frills airline doesn't provide.

Low-cost carriers account for 20 percent of all available airline seats worldwide. Within Asia, however, budget airlines provided just 9 percent of all seats available last year, according to global travel and transport information company OAG.

Budget carriers in Asia have benefited from a recent easing of some regulations that had checked their growth in the region. Regulators in Malaysia, Singapore and Thailand have helped their business by opening airport terminals for low-cost airlines.

AirAsia, in particular, has successfully transplanted to Asia the low-cost model pioneered by Southwest Airlines Co. (LUV) in the U.S. Its planes offer no frills, operate from cheaper secondary airports and turn around quickly to save fuel.

While the low-cost business model has succeeded with short, regional flights, it has yet to prove profitable on longer, intercontinental routes. Newcomer Oasis Hong Kong Airlines recently started service from Hong Kong to London and Vancouver, while Australian budget carrier Jetstar began flights to Honolulu and Japan.