Qatar Airways buys 9.6% of Cathay Pacific
- Author: Darren Santiago Nov 07, 2017,
Nov 07, 2017, 0:20
Qatar's national airline has bought a near-10% stake in rival carrier, Cathay Pacific.
Despite the troubles Cathay has experienced, CEO of Qatar Airways Akbar al-Baker called it one of the strongest air carriers in the world, with huge potential over the long term.
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 Pacific share fell 4.7% on Monday, as investors became concerned about the direction it was taking with Qatar on its registry.
For state-owned Qatar Airways, its first major stake in an Asian airline will allow it to boost its global influence and potentially increase traffic through its Doha hub, amid the worst political crisis in years among the Gulf Arab states.
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Cathay did not put out a statement, but tweeted that the Swire Group and Air China continue to hold 74.9% of the airline.
The seller, Hong Kong-listed Kingboard Chemical, said Qatar Airways would pay HK$13.65 a share, or almost HK$5.2 billion ($666 million) in total.
Both airlines already collaborate together as members of the oneworld alliance. It added that Qatar's purchase displays confidence in Cathay's future.
Qatar Airways' investment strategy has seen it acquire 20 per cent of British Airways-parent International Consolidated Airlines Group, 10 per cent of South America's Latam Airlines Group and 49 per cent of Italy's Meridiana.
However, Cathay discontinued its Doha service less than two years later, saying at the time it was for "commercial reasons".