What can you buy with $1? How about Tigerair Australia?

Virgin Australia will pay just $1 to take full ownership of discount carrier Tigerair Australia.

Singapore-based parent company Tiger Holdings has agreed to sell its remaining 40% stake in the carrier, which has struggled to reach profitability, for the tiny sum but will continue to license its brand to Virgin.

Virgin bought a 60% stake in Tiger in mid-2013 and Virgin’s chief executive, John Borghetti, said on Friday that moving to full ownership would enable it to bring the discount carrier to profitability sooner.

“Under this proposed transaction, we will benefit from the economies of scale and achieve profitability ahead of schedule by the end of 2016, by leveraging the resources of the wider Virgin Australia Group,” he said.

Under the deal, Virgin will also obtain brand rights to fly Tigerair Australia to overseas destinations, which could see it compete internationally with Qantas-owned Jetstar.

Borghetti said Virgin would continue to operate Tiger as a separate brand. “We remain committed to maintaining the airline’s low-cost business model and the separate Tigerair brand, ensuring that we can continue to deliver the most competitive pricing in Australian budget travel,” he said.

The move comes after a difficult 12 months for Australian airlines as an intense battle for market share saw Virgin and Qantas suffer heavy losses.

Virgin posted a full-year loss of $355.6m, while Qantas suffered a record loss of $2.8bn.