Qatar takes shareholding interest in Cathay Pacific


The Middle Eastern carrier said it bought nearly 3.8 million Cathay shares, which represents a 9.6 percent stake in Hong Kong's biggest airline.

"Qatar Airways is very pleased to complete its financial investment in Cathay Pacific".

For Cathay, the Qatar stake will give it a third strategic shareholder behind Swire Pacific Ltd and Air China, potentially complicating a restructuring plan aimed at slashing HK$4 billion in costs over three years.

Elsewhere in Asia, Qatar Airways is looking to establish a division in India that could operate as many as 100 single-aisle planes as Qatar's flagbearer seeks to tap into the world's fastest growing major aviation market. This amounts to 9.61% of Cathay's shares. As a result, the state's airline has lost important routes in the UAE and Saudi Arabia. At the same time the move reasserts the company's global ambitions 4 1/2 months after American Airlines rejected an investment bid. With Cathay Pacific now undergoing hard times as it looks to restructure and streamline, only time will tell if it was a worthy investment by the Gulf Carrier to tap into the Asian market, or merely another airline to add to its repertoire. "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".

The stock closed 1.5% lower, while the broader market was flat.

Cathay did not put out a statement, but tweeted that the Swire Group and Air China continue to hold 74.9% of the airline. "This may not necessarily be favorable for Cathay as it is facing operating challenges and undergoing transformation". The transaction is expected to take place later in Hong Kong.

Qatar Airways is not the only airline to look to Asia for further expansion. Kingboard, which makes laminates and copper foil and had been seen as a possible front for a takeover of Cathay, according to Bocom International analyst Geoffrey Cheng, said its investment has yielded a profit of about HK$800 million.

"This investment further supports Qatar Airways investment strategy, which already includes 20% investment in International Airlines Group, 10% investment in LATAM Airlines Group and 49% investment in Meridiana".

In other Qatar Airways-related news, The Times of India reported that a Qatar Airways Doha-Bali flight was diverted to Chennai after an "intoxicated" Iranian woman used her sleeping husband's thumb to open his mobile phone - and discovered messages that she believed showed he was cheating on her.

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