Qata Airways Buys $662 Million Stake in Cathay Pacific

07 November, 2017, 00:22 | Author: Darnell Patrick
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Cathay Pacific Airways' share price dipped by almost 5% this morning (Hong Kong local time) following Qatar Airways' move to acquire a 9.6% stake in the East Asian carrier.

Qatar Airways on Monday has bought a stake in Cathay Pacific, giving the Doha-based airline a toehold in the potentially lucrative Asian aviation market.

Qatar Airways has acquired approximately a 9.61% stake in Cathay Pacific Airways.

Cathay's shares fell 1.7 per cent to HK$12.98 in afternoon trading after slumping as much as 4.9 per cent in the morning session.

Qatar Airways has been trying to compensate for this lost traffic and revenue by increasingly looking at global markets to expand its reach. Cathay also has cross-shareholdings with mainland carrier Air China, which owns just under 30 percent.

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.

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.

Since June, Qatar has been isolated by neighbouring countries including Saudi Arabia and the United Arab Emirates. "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".

Qatar and Cathay Pacific have worked together previously on the Hong Kong-Doha route. Qatar owns slightly more than 20% of IAG, the parent of British Airways, Iberia, Aer Lingus, Vueling and Level; 10% of South America's LATAM Airlines Group; and 49% of Italian carrier Meridiana.



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