Doha-based Qatar Airways announced late Sunday that it has entered an agreement to purchase 378,188,000 shares of Cathay Pacific Airways Limited (“Cathay Pacific”), being roughly 9.61% of the total issued share capital. The deal was completed Monday afternoon in Hong Kong at roughly USD $662 million.
The large investment further supports the airlines’ investment strategy, which already includes a 49% investment in Meridiana, 20% in the International Airlines Group (Aer Lingus, British Airways, IAG Cargo, Iberia, LEVEL, Vueling, and Avios Group), and 10% in the LATAM Airlines Group out of South America.
“Qatar Airways is very pleased to complete its financial investment in Cathay Pacific. 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 Airways Group Chief Executive, His Excellency Mr. Akbar Al Baker said in a news release.
Air China Limited and Swire Pacific Limited together continue to hold 74.99% shares in Cathay Pacific.
Cathay Pacific Chief Executive Officer Rupert Hogg said in a statement, “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 partnership.”
Cathay Pacific and Qatar Airways currently codeshare on one daily flight operated by Qatar Airways between Doha and Hong Kong, namely flight QR815/QR816 operated by a Boeing 787-8 Dreamliner. Both airlines are growing in terms of destinations, with Qatar adding St. Petersburg, Russia; Chiang Mai, Thailand; Canberra, Australia; Adana, Turkey; Sarajevo, Bosnia and Herzegovina; Shiraz, Iran; and Pattaya, Thailand this year, and Cathay adding Yangon, Myanmar; Brussels, Belgium; Copenhagen, Denmark; and Dublin, Ireland this year, as well.
The acquisition of such a large amount of shares comes from Kingboard Chemical Holdings, who sold their shares to Qatar Airways for HK$5.16 billion ($662 million) in cash. Kingboard said the group will recognize a gain of about HK$800 million from the transaction in its annual results, according to Nikkei Markets.
All photos by author Max Trimm.