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Published: Tue, November 07, 2017
Economy | By Melissa Porter

Qatar Airways acquires almost 10 per cent of Cathay Pacific

Qatar Airways acquires almost 10 per cent of Cathay Pacific

Qatar Airways will buy a near 10% stake of Cathay Pacific for HK$5.6bn ($662m; £506m), giving the Middle Eastern airline more access to China's lucrative aviation market.

With its stake in Cathay, Qatar will own significant stakes in four world airline groups.

The Middle Eastern carrier said it bought nearly 3.8 million Cathay shares, which represents a 9.6 per cent stake in Hong Kong's biggest airline.

Cathay shares fell 3.9 percent by mid-morning in Hong Kong, to HK$12.68. Air China Limited and Swire Pacific Limited together continue to hold 74.99 percent shares of the airline. According to Reuters, Qatar Airways bought roughly 378 million of Cathay Pacific's shares from Hong Kong's Kingboard Chemical Holdings for about US$661 million.

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 Pacific is a fellow oneworld member and is one of the strongest airlines in the world, respected throughout the industry and with massive potential for the future".

Cathay shares have risen by 29.4 per cent since the start of January despite the airline in August posting its worst first-half loss in 20 years.

Cathay flew between Hong Kong and Qatar Airways' Doha hub as part of a codeshare arrangement between 2014 and 2016. The two carriers codeshared on each other's services between the two cities, with Cathay also placing its CX airline code on Qatar-operated services beyond Doha to points in Europe, the Middle East and South America and Qatar adding its QR airline code on selected Cathay-operated flights to Australia, Japan, New Zealand and South Korea.

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