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Qatar Airways will purchase 9.61% of Hong Kong airline Cathay Pacific.
The $662 million stock purchase is expected to be finalized Monday, Qatar said.
“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 CEO Akbar Al Baker said in a prepared statement.
Qatar’s investment in the Asia-Pacific carrier comes three months after it abandoned an effort to purchase up to 10% of American Airlines. American — which is embroiled in a longstanding dispute over state subsidies to Qatar, Emirates and Etihad — had expressed sharp opposition to a Qatar investment in American.
With its stake in Cathay, Qatar will own significant stakes in four world airline groups. 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.
Pressed by competition from low-cost carriers and from growing Chinese airlines, Cathay Pacific lost $262 million during the first six months of this year. Qatar, meanwhile, continues to suffer from a diplomatic dispute with Saudi Arabia, the United Arab Emirates, Egypt and Bahrain that has forced it to cease flights to those countries and to fly around those nations’ air space.
Qatar is purchasing its 378,000 Cathay shares from Hong Kong-based Kingboard Chemicals Holdings Limited.
Source: travelweekly.com