Qatar Airways acquires stake in Cathay Pacific: Is there a strategy in place?

IT is not surprising to see cash-rich Qatar Airways buying stakes in other carriers. It already has stakes in International Airlines Group (20%) which owns British Airways, Iberia, Vueling and Aer Lingus; South America’s LATAM Airlines Group (10%) and Italian airline Meridiana (49%). It was however rebuffed by American Airlines.

Courtesy Qatar Airways

The Middle East airline’s latest buy is a 9.6% stake in one Asia’s leading airlines, namely Cathay Pacific, for HK$6.5bn (US$662m). Now that might not have come as expected, although both airlines which are OneWorld partners have publicly acknowledged the outcome as a positive one. Qatar chief executive Akbar Al Baker was pleased with “massive potential for the future” and Cathay chief executive Rupert Hogg looked forward to “a continued constructive relationship.”

Unlike Gulf rival Emirates Airlines, Qatar has seen acquisitions in key partners as a way to access the wider market. Tying up with Cathay would open up opportunities to tap into the wide and growing China market. That depends on how much influence Qatar can assert on Cathay’s China channels, quite unlike the Qantas-Emirates’ relationship although the latter was merely a commercial arrangement. Yet too the way that the aviation business is shaped by the somewhat promiscuous relationships across the industry, it may well be a sitting investment for profit, albeit Cathay’s recent poorer performance.

Perhaps Qatar’s move may be telling more of Cathay, which in fact is a rival airline. Things may not be looking as good at the Hong Kong-based carrier as it embarked on stringent cost-cutting measures to turn its fortune around. Interestingly, news of Qatar’s interest was met with a 5% dip in the price of Cathay’s stock.

Advertisements

About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran with more than 30 years' experience, columnist, pubished author of fiction, poetry, plays and travel stories, editor and management consultant. Nature lover who abhors cruelty of any form to animals, and a tireless traveler.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: