Qatar Airways has just acquired 9.61 per cent of Hong Kong's flagship carrier, Cathay Pacific, making it the third-largest shareholder in the Asian airline behind Swire Pacific Limited and Air China Limited, which together hold 74.99 per cent of the company's shares.
Commenting on the acquisition, Cathay Pacific CEO, Rupert Hogg said: "Qatar Airways is one of the world's premier airlines".
Qatar's flag carrier had earlier announced an agreement to purchase 378,188,000 shares in Cathay Pacific Airways Limited, equivalent to approximately 9.6% of the total issued share capital, from Hong Kong-based Kingboard Chemical Holdings. Cathay Pacific shares were at HK$12.68 in morning trade in Hong Kong on Monday.
Without having domestic flights as a way to underpin its earnings, carriers in Asia such as Singapore Airlines and Cathay has struggled against Middle East and Chinese rivals, as Cathay already has shed over 600 jobs over the last six months.
The airline has been unable to fly to the previously lucrative markets of the United Arab Emirates and Saudi Arabia as part of an airspace rights dispute with neighbours, and has been looking to invest elsewhere to broaden its reach. "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".
Pressed by competition from low-priced carriers and from growing Chinese airlines, Cathay Pacific lost $262 million during the first six months of this year.
Qatar Airways' investment strategy has seen it acquire 20 per cent of British Airways-parent International Consolidated Airlines Group, 10 per cent of South America's Latam Airlines Group and 49 per cent of Italy's Meridiana. It added that Qatar's purchase displays confidence in Cathay's future.