Cathay Pacific, like Qatar Airways, belongs to the oneworld global airline alliance.
Kingboard Chemical Holdings based in Hong Kong, announced it sold the stake in Cathay Pacific to Qatar Airways at the price of HK$5.15 billion or $661 million, making the carrier, based in the Middle East, Cathay's third largest shareholder. Cathay closed 1.5 per cent lower, while the broader Hong Kong market was flat.
Qatar Airways has been trying to compensate for this lost traffic and revenue by increasingly looking at worldwide markets to expand its reach. "Cathay Pacific is a fellow Oneworld member and is one of the strongest airlines in the world, respected throughout the industry with massive potential for the future". 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.
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The stake by Qatar in Cathay will give the airline a third shareholder that is strategic behind Air China Ltd and Swire Pacific, possibly complicating its plan for restructuring, whose goal is to slash costs of HK$4 billion during the next three years.
Mr Will Horton, a Hong Kong-based senior analyst at CAPA Centre for Aviation, said that while Qatar Airways' investment in Cathay was likely to be passive, difficulties could arise if the two carriers tried to better integrate their hubs. It also removed its CX code from Qatar-operated flights beyond Doha.
Further, the economic slowdown - both in China and elsewhere - had led to a significant reduction in premium corporate travel in business and first class, particularly on long-haul routes.