DOHA: Qatar Airways has bought a stake in Cathay Pacific, it announced Monday, giving the Doha-based airline a toehold in the potentially lucrative Asian aviation market.
The state-owned Gulf carrier said it had acquired a 9.6 percent stake in Cathay, which would make it the third largest shareholder in the Hong Kong airline.
Bloomberg News said the deal was worth $662 million (570 million euros).
Qatar Airways group chief executive Akbar Al-Baker said in a company statement that Cathay was “one of the strongest airlines in the world,” adding it had “massive potential.”
The acquisition comes during the ongoing political crisis in the Gulf, the worst to hit the region in years.
Since June, Qatar has been isolated by neighboring countries including Saudi Arabia and the United Arab Emirates.
As part of that dispute, Qatar Airways has been stopped from flying to Saudi Arabia and the UAE, previously popular destinations for the carrier.
The deal with Cathay Pacific also comes after Qatar Airways halted a bid in August to buy a 10 percent stake in American Airlines.
Corrine Png of Singapore-based research firm Crucial Perspective described the acquisition as a “trophy win” for Qatar Airways but not without potential obstacles.
Qatar and Cathay’s two other major shareholders, Swire Pacific and Air China — which own 45 and 30 percent respectively — have “different corporate cultures” with “potentially conflicting interests and strategic focus,” said Png.
“Moreover, Air China and Qatar Airways have non-economic political interests given that they are state-owned enterprises,” Png told AFP.
Cathay shares dropped around 4.4 percent in early trade but pared losses mid-morning and in the afternoon.
The troubled Hong Kong carrier in August reported a massive net loss of HK$2.05 billion ($262 million) for the first half of 2017 as it struggled with intense competition from rivals.
Qatar buys 9.6% stake in Cathay Pacific
Qatar buys 9.6% stake in Cathay Pacific
Closing Bell: Saudi main index climbs to 10,485
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Sunday, gaining 34.32 points, or 0.33 percent, to close at 10,484.59.
The total trading turnover of the benchmark index stood at SR2.59 billion ($690 million), with 168 listed stocks advancing and 87 declining.
The Kingdom’s parallel market Nomu also gained 100.37 points to close at 23,454.65.
The MSCI Tadawul Index advanced by 0.13 points to 1,377.44.
The best-performing stock on the main market was Nama Chemicals Co., whose share price increased by 9.98 percent to SR22.38.
The share price of Al Masar Al Shamil Education Co. rose by 9.15 percent to SR23.85.
Saudi Paper Manufacturing Co. also saw its stock price climb by 8.42 percent to SR57.95.
Conversely, the share price of Canadian Medical Center Co. dropped by 6.37 percent to SR6.03.
The stock price of Kingdom Holding Co. also declined by 3.16 percent to SR8.28.
In the parallel market, Alfakhera for Mens Tailoring Co. was the top performer, with its share price advancing by 16.40 percent to SR8.80.
On the announcements front, Theeb Rent a Car Co. said it had signed a long-term vehicle leasing services contract valued at SR110.4 million with Hungerstation Co.
Under the deal, Theeb will lease 2,000 vehicles to HungerStation for a period of four years starting from 2026, according to a Tadawul statement.
The statement added that the vehicles will be delivered in batches within the first six months from the contract start date, taking into consideration global logistical circumstances and procedures beyond the control of both the agents and the company.
The contract is expected to have a positive impact on the company’s financials from the first quarter of 2026.
The share price of Theeb Rent a Car Co. declined by 0.79 percent to SR37.80.
