QATAR Airways has acquired 9.61 per cent of Hong Kong's Cathay Pacific Airways with Being-based Air China and Hong Kong-based Swire Pacific continuing to own 74.99 per cent.
Said Cathay CEO Rupert Hogg: "Qatar Airways is one of the world's premier airlines. We already work together closely as fellow members of the oneworld alliance and we look forward to a continued constructive relationship."
The purchase makes Qatar Airways the third biggest shareholder of Cathay Pacific with its HK$5 billion (US$6430.8 million) share purchase. Swire remains the biggest
Qatar agreed to buy 378.18 million shares at HK$13.65 per share for HK$5.16 billion from Hong Kong industrial company Kingboard Chemical, according to a stock exchange filing.
Kingboard founder Paul Cheung Kwok-wing had only bought his stake earlier this year and declared he was "long-term investor", reported Hong Kong's South China Morning Post. With the share sale, his company can expect about HK$800 million in profit.
Thus Swire Pacific remains the biggest shareholder with 45 per cent stake with Air China controlling 29.99 per cent.
Qatar Airways CEO Akbar Al Baker said Cathay was "one of the strongest airlines in the world, respected throughout the industry and with massive potential for the future".
But last year, it lost HK$575 million and in the first half this year, HK$2.05 billion. It cut 600 jobs in May as part of a range of measures to return to profitability and also asked its pilots to accept pay freezes and changes in pension benefits.
Cathay Pacific and Qatar Airways both offered Hong Kong-Doha flights until February 2016, when Cathay dropped the route. Qatar Airways now flies to Hong Kong twice a day.
Ellis Taylor of aviation journal Flight Global suggested that Cathay had "little to no notice of the transaction, and their response shows perhaps some uneasiness with the situation that they now find themselves in".