Qatar Airways buys 9.6% stake in Cathay

Qatar Airways said on November 6 it had agreed to buy 9.6 percent of Hong Kong rival Cathay Pacific Airways.

Qatar adds that the investment "further supports" the airline's investment strategy.

Last year, Cathay Pacific lost HK$575 million (US$73.6 million) in its annual revenue, which was followed by a HK$2.05 billion (US$262 million) loss in the first half of this year.

Without domestic flights to underpin earnings, Asian carriers Cathay and Singapore Airlines have struggled against Chinese and Middle Eastern rivals, with Cathay already shedding 600 jobs since May.

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.

Precisely how the dynamic between the two airlines in terms of future cooperation will look is yet to be seen.

Despite Cathay's woes, Qatar Airways chief executive Akbar al-Baker described it as "one of the strongest airlines in the world. with massive potential for the future". Earlier in the year, American Airlines rebuffed Qatar.

After falling almost 5%, Cathay Pacific's shares trimmed losses and were down around 1.5% in afternoon trading in Hong Kong.

Commenting on the acquisition, Cathay Pacific CEO, Rupert Hogg said: "Qatar Airways is one of the world's premier airlines". 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.

Swire Pacific holds a stake of 45% in Cathay, while Air China has 30%. The route was axed "for commercial reasons".