Sir Richard Branson's Virgin Group has bought a 20% stake in Air Asia X, a new Malaysian airline offering budget long-haul flights to Asia and Europe.
The two partners have high hopes for Air Asia X
The deal, the value of which has not been disclosed, gives the tycoon a foothold in Asia's fast-growing budget airline sector.
The airline has been given permission to fly from Malaysian capital Kuala Lumpur to the UK, Australia and China.
Air Asia X is controlled by Malaysian businessman Tony Fernandes.
Air Asia, its short-haul counterpart, has proved hugely successful since its 2001 launch and raised its international profile last year by signing a sponsorship deal with English football club Manchester United.
Virgin confirmed that it had bought a fifth of the shares in Fly Asian Xpress, the holding company for the airline.
"I am thrilled to be able to support them in this venture and look forward to seeing low-cost, long-haul travel being opened up from their base in Malaysia," Sir Richard said.
The tycoon said he expected the new airline to enjoy the "same success" as its short-haul counterpart had in the past six years.
Air Asia X will begin its first services, to Australia and China, next month. Other services, including flights to London and India, are expected to follow.
The airline has ordered 15 planes from Airbus as a signal of its future ambitions.
"We believe that this partnership will be a sound and successful investment," said Kalimullah Hassan, from Fly Asian Express.
Virgin recently launched its first internal budget flights in the US after a long battle to establish the Virgin America brand.
It also has a 25% stake in Australian carrier Virgin Blue.