HONG KONG: Qatar Airways, The National Flag Carrier of Qatar has bought a 9.6 per cent stake in Hong Kong’s Cathay Pacific for HK$5.16 billion ($661.3 million), a report said.
The Gulf carrier, which has been acquiring minority shareholdings in other airlines to help boost transit traffic through its Doha hub, dropped plans in August to buy a stake in American Airlines after the US Company rebuffed its interest.
Qatar Airways picked up the stake on Monday from Kingboard Chemical, a Hong Kong-listed manufacturer that built its Cathay position while shares were under pressure because of the Hong Kong airline’s disappointing financial performance.
Akbar Al Baker, Chief Executive of Qatar Airways, said he was pleased with the “financial investment” in Cathay, which he described as “one of the strongest airlines in the world, respected throughout the industry and with massive potential for the future”.
Rupert Hogg, Cathay’s Chief Executive, said he looked forward to “a continued constructive relationship” with Qatar Airways, which is a fellow member of the Oneworld alliance.
However, analysts said that the shareholding would complicate life for Cathay, which has been hit hard by competition from fast-growing, state-backed rivals in China and the Gulf.
Qatar Airways will become Cathay’s third-biggest shareholder after Swire, the British-based conglomerate, with 45 per cent and Air China with 29.9 per cent.
“Cathay and Air China would not want such a shareholder even though they will say they welcome it,” said Corrine Png, the Chief Executive of Crucial Perspective, an equity analysis company in Singapore. “Qatar won’t be a sleeping investor. They will try to have influence, whether in Cathay’s transformation programme or flight schedules, hoping to feed traffic from Hong Kong and China into Qatar’s network.”
Qatar Airways already has a 20 per cent stake in International Airlines Group, the parent company of British Airways, as well as a 10 per cent stake in South America’s Latam Airline Group and a 49 per cent stake in Italy’s Meridiana.
With a big order book of new aircraft, Qatar Airways has been looking for other ways to expand its traffic and maintain its ambitious stance in spite of the embargo.