Qatar Airways buys near 10% Cathay Pacific stake

Qatar Airways buys near 10% Cathay Pacific stake

Troy Powers
November 7, 2017

Qatar Airways is buying almost 10 per cent of Hong Kong carrier Cathay Pacific Airways for about $662 million, the companies said Monday, in a deal making it Cathay's third-biggest shareholder.

Qatar Airways Group Chief Executive, His Excellency Akar Al Baker said in a statement: "Qatar Airways is very pleased to complete its financial investment in Cathay Pacific".

Qatar Airways will purchase the stake for HK$5.16 billion (€570 million) from Kingboard Chemical Holdings and associates, according to a statement, becoming Cathay's third-largest investor after local conglomerate Swire Pacific, with a 45 per cent holding, and Air China Ltd. with nearly 30 per cent.

Cathay shares fell 3.9 percent by mid-morning in Hong Kong, to HK$12.68.

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Hong Kong's Kingboard Chemical yesterday said it had sold the stake to Qatar Airways for HK$5.16 billion (S$902 million), making the Middle Eastern carrier the third-largest shareholder in Cathay.

Qatar Airways has been trying to compensate for this lost traffic and revenue by increasingly looking at global markets to expand its reach.

In May, Cathay announced plans to cut around 600 jobs to "improve the speed and quality of decision-making and putting a greater focus on its customers" as a response to increased competition from Asia's low-priced carrier market.

Cathay Chief Executive Rupert Hogg said the two carriers already worked closely together and "we look forward to a continued constructive relationship". It added that Qatar's purchase displays confidence in Cathay's future. Cathay is 45 percent owned by Hong Kong conglomerate Swire Pacific. The route was axed "for commercial reasons". The company also owns 20 per cent of International Airlines Group, which controls European carriers Aer Lingus, Iberia and Vueling; 10 per cent of Chile's Latam Airlines Group; and 49 per cent of Meridiana, Italy's second-biggest carrier.