VIRGIN Australia is positioning itself to claim a bigger slice of the $8 billion Chinese visitor market, striking a new deal with China's HNA Group.
Under the $159 million deal, Virgin will begin daily flights between Australia and China by mid-2017 and codeshare with HNA's carriers including Grand China Airlines, Hainan and Lucky Air. 
Direct services by Virgin are likely to either Bangkok or Shanghai, significantly broadening the Australian carrier's international network.
In return, HNA will score a 13 per cent stake in Virgin Australia with an option to go up to 20 per cent, at the expense of other major airline shareholders and founder Richard Branson.
Air New Zealand will see its share shrink from 25.9 per cent to 22.5, Etihad's stake reduces from 24.2 to 21 per cent, Singapore Airlines from 22.8 to 19.8 and Sir Richard's slice of the pie goes from 10 per cent to 8.7.
Virgin Australia CEO John Borghetti said the deal represented "the future" for the airline. "This is a huge growth story for us, when you consider we carry very little domestic traffic from China," he said.
"All of a sudden it will give us access to the 1.2 million Chinese people who come to Australia and fly domestically." In 2015, Chinese visitors spent $8.3 billion making them Australia's most important inbound market.
By 2020, as many as 2 million Chinese visitors could be travelling to Australia and spending more than $13 billion.
No immediate changes in routes or fares were expected with any domestic capacity growth to be "demand driven".
Mr Borghetti said HNA was China's largest private operator of airlines, carrying 77 million passengers a year to 200 destinations.
"It's a big coup for such a large company as HNA to recognise the potential of Virgin Australia," he said.
"It sets us up for very good growth going forward." Qantas has deals with China Eastern and China Southern Airlines, with which it provides 170 services a week.
Federal Tourism Minister Richard Colbeck said the Virgin-HNA agreement would strengthen the airline's position in the market.
"We want to have healthy and strong airlines," said Mr Colbeck. "This deal opens up an enormous network into China of secondary cities, and these connections will help them grow their business." IG market analyst Evan Lucas said the deal delivered "balance sheet assurance" for Virgin Australia which was facing a hole as a result of Air New Zealand's likely exit.
"The real positive is they've got a capital backer that sures the balance sheet up," he said.
"And China is without doubt the number one tourism market, so it's clearly going to be a lucrative decision." The Australian Competition and Consumer Commission is still to sign off on the deal, but Mr Borghetti saw no reason why the watchdog would not.Virgin shares soared 5.3 per cent yesterday to 29.5c.