Tourism Australia and Virgin bond

Tourism Australia has moved quickly to make up for a loss of funding from Qantas by signing a new A$12 million ($15 million) marketing partnership with Virgin Australia.

Virgin Australia and Tourism Australia will each contribute A$2 million annually for the next three years for joint marketing activities.

The memorandum of understanding replaced a previous A$6 million partnership Virgin and the body signed in May.

Virgin chief executive John Borghetti said the money would be spent around major sporting, business and cultural events.

"Both Virgin Australia and Tourism Australia recognise the importance of tourism to Australia's economy and are committed to promoting Australia as a world-class destination," Borghetti said.

Tourism Australia managing director Andrew McEvoy said the United States would be a key focus for the additional marketing funds, with US arrivals to Australia up 4 per cent so far this year.

"Virgin Australia has an international footprint which spans a number of Tourism Australia's key markets, including New Zealand, the United States, Europe and the Middle East," he said.

In November, Qantas chief executive Alan Joyce ended the airline's partnership with Tourism Australia.

Joyce said the partnership had to be terminated because of Tourism Australia chairman Geoff Dixon's clear conflict of interest in a group of investors proposing to take the airline in a different direction.

As part of its three-year partnership with Tourism Australia, which was due to end in June 2013, Qantas put in A$5 million in cash each year and supplied tickets for media and trade events.

- AAP