British billionaire Richard Branson of Virgin Group is to take a 20 percent stake in Malaysia's AirAsia long-haul budget carrier to help get it off the ground, a report said Tuesday.

AirAsia chief executive Tony Fernandes declined comment on the report even as the company said it would be making a major announcement on Friday.

"I am not saying anything," Fernandes told AFP .

In a separate statement, the company said long-haul operator "AirAsia X will be making a major announcement involving a strategic global investor. We promise you it will be a memorable one."

Star newspaper cited an industry source as saying that "the selling of the 20 percent stake is the first round of funding required by the airline to kick-start operations and partly pay for the 15 aircraft that have been ordered."

Branson, via the Virgin Group, would take a 20 percent stake in Fly Asian Xpress Sdn Bhd (FAX), the long-haul operator.

A major coup

Shukor Yusof, aviation analyst with Standard and Poor's in Singapore described Branson's entry as a "coup for Fernandes."

"If the deal happens, it will provide vital funds for the long-haul carrier to take-off," he said.

Shukor said the task now for Fernandes was to put the plans in place and start flying after a three-month delay.

Peter Harbison, executive director with the Sydney-based Centre for Asia Pacific Aviation, said the deal would have a major impact on the industry.

"Branson's involvement is good for Fernandes. It gives credibility to AirAsia's long-haul carrier. It gives passengers a lot of connectivity to European routes," he told AFP .

Harbison said long-haul travellers would stand to gain by cheap fares and its aggressive pricing strategy will spark competition among airlines.

"It will create a lot of competition among all the airlines," he said.

Harbison discounted critics who say the short-haul business plan cannot simply be scaled up to long-haul.

"Fernandes has the skills to make the plan succeed. The carrier has good strategies, good management and cheap prices," he said.

Founders to sell shares to Branson

Fernandes, who holds 50 percent of FAX, and his deputy Kamarudin Meranum with 30 percent, are expected to sell some of their shares to Branson, the founder of Virgin Group.

FAX has 15 widebody A330-300 airliners on order from Airbus, the European manufacturer.

It is scheduled to begin long-haul flights to China and Australia Sept 8, using three leased planes, from the low-cost carrier terminal at Kuala Lumpur International Airport (KLIA), company executives have said.

At its launch in January, the carrier promised budget flights to Britain beginning in July.

Fernandes launched AirAsia as a pioneering regional budget carrier in December, 2001, with just two aircraft. It now serves domestic and international routes throughout the region.

Fernandes is not the first to try budget long-haul travel and analysts say the model remains to be proven despite its success on short flights.

AirAsia shares closed 1.6 percent higher, adding 0.03 to RM1.94 in early trade.