Singapore Airlines Ltd., Asia’s biggest carrier by market value, will spend $319 million (S$400 million) buying stock in budget carrier Scoot Pte, boosting the capital of its subsidiary which plans to buy Boeing Co. 787s.

The airline bought 400 million shares in Scoot at S$1 apiece, Singapore Air said in a statement to the stock exchange today. The investment will be funded through the company’s internal sources, it said.

Singapore Air has set up Scoot, a long- and medium-haul low-fare carrier, to compete against budget carriers that account for more than 50 percent of the seats in the island city. Scoot will take delivery of two Boeing 787 Dreamliners starting in November as it expands operations. Scoot has 20 Dreamliners on order.

The investment in Scoot, fully owned by Singapore Air, comes after the parent airline increased its stake in affiliate Tiger Airways Holdings Ltd. through a rights offer last year.

To contact the reporter on this story: Kyunghee Park in Singapore at [email protected] To contact the editors responsible for this story: Anand Krishnamoorthy at [email protected]

Photo Credit: A Scoot Airlines 777 arriving at Sydney's airport. Simon Clancy / flickr.com