Qatar Airways has acquired a 9.61 per cent stake in Hong Kong’s Cathay Pacific, making the Qatari carrier the third largest shareholder in the company, which has been battling to cut costs amid heavy losses reported in the first half of 2017.
The purchase is estimated to have cost Qatar Airways $661m
It is the fourth overseas investment by Qatar Airways. It previously acquired 20 per cent of British Airways-parent International Consolidated Airlines Group, 10 per cent of Chile-based LATAM Airlines, and 49 percent of Italy’s Meridiana.
The investment in Cathay Pacific follows the rejection of an offer by Qatar Airways CEO Akbar al-Baker made earlier this year to acquire shares in American Airlines, one of the US Big Three airlines that accused Qatar Airways, along with Abu Dhabi’s Etihad Airways and Dubai’s Emirates Airline, of receiving billions of dollars in government subsidies.
According to a report by news agency Reuters, analysts based in Hong Kong say the entry of Qatar Airways into the Cathay Pacific registry potentially complicates relationships with its two larger shareholders namely, namely Swire Pacific, which owns a 45 per cent stake, and Air China, which owns 30 per cent.
This concern appears to have influenced the 1.5 per cent drop in Cathay Pacific’s share price on 6 November.
MEED understands Cathay started flying between Hong Kong and Doha in 2014 as part of a codeshare agreement. However, the service was terminated in 2016 due to commercial reasons.