News Worms
News Worms

Qatar Airways to buy almost 10% of Cathay

Qatar Airways has bought a 9.61 per cent stake in Cathay Pacific, citing the Hong Kong-based carrier's "massive potential" for the future.

"Qatar Airways is one of the world's premier airlines".

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

After falling almost 5%, Cathay Pacific's shares trimmed losses and were down around 1.5% in afternoon trading in Hong Kong.

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.

The transaction is Qatar Airways' fourth investment in a foreign airline group.

The stake by Qatar in Cathay will give the airline a third shareholder that is strategic behind Air China Ltd and Swire Pacific, possibly complicating its plan for restructuring, whose goal is to slash costs of HK$4 billion during the next three years.

The airline has been unable to fly to the previously lucrative markets of the United Arab Emirates and Saudi Arabia as part of an airspace rights dispute with neighbours, and has been looking to invest elsewhere to broaden its reach. In a statement regarding the sale, Cathay Pacific's CEO, Rupert Hogg, said, "We already work together closely as fellow members of the Oneworld alliance and we look forward to a continued constructive relationship". 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.

However, Cathay discontinued its Doha service less than two years later, saying at the time it was for "commercial reasons".


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