Qatar Airways is set to sell its 9.6% stake in Cathay Pacific Airways for $896 million, marking the end of its eight-year investment in the Hong Kong-based carrier. The sale, valued at $1.4 per share, is subject to approval from Cathay’s independent shareholders.
The transaction represents a significant return on Qatar Airways’ initial $662 million investment in 2017, when it acquired the stake from Kingboard Chemical Holdings and other companies. This move was notable as the first investment by a Middle Eastern carrier in an East Asian airline.
Qatar Airways’ Investment Strategy
Qatar Airways CEO Badr Mohammed Al-Meer stated that the decision to divest its stake in Cathay Pacific is part of a proactive strategy to optimize investments and position the group for long-term growth, following a period of record profitability and strong performance. The airline has been actively managing its investments, with a focus on strategic partnerships and growth opportunities.
Upon completion of the buyback, Cathay’s two largest shareholders, Swire Pacific and Air China, will increase their holdings to 47.7% and 37.8%, respectively. Cathay Pacific’s chairman, Patrick Healy, emphasized the company’s confidence in its future, citing a $12.9 billion investment in its fleet and lounges over the next seven years, as announced last year.
Implications for Cathay Pacific and the Airline Industry
Cathay Pacific and Qatar Airways will continue to collaborate through existing codeshare and alliance agreements, with both airlines being members of the Oneworld alliance. The sale does not impact their partnership, ensuring continued cooperation and connectivity for passengers.
Qatar Airways has a history of investing in airlines worldwide. It retains a 5% stake in China Southern Airlines, acquired in 2019, and owns a 25% share of the International Airlines Group, the parent company of British Airways, Iberia, and Aer Lingus. Additionally, it has recently acquired a 25% stake in Virgin Australia and is nearing completion of a 49% equity investment in RwandAir.
Future Investments and Partnerships
The airline’s investment strategy appears focused on diversifying its portfolio and strengthening its presence in key markets. As the airline industry continues to evolve, Qatar Airways’ investments will be closely watched for signs of further expansion or consolidation.
With the sale of its Cathay Pacific stake pending approval from independent shareholders, the next steps will depend on the outcome of this process. Investors and industry observers will be monitoring the situation for any further developments or announcements regarding Qatar Airways’ investment plans.
