Qatar Airways broadened its reach globally by acquiring a stake of 9.6% in Cathay Pacific, adding another important investor to the carrier's complicated share register during a time when it seeks to slash costs.
The Middle Eastern carrier will purchase 378.2 million shares from Kingboard Chemical, Kingboard Investments and Kingboard Laminates for HK$5.16 billion ($661 million).
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.
Qatar Airways will purchase the stake for HK$5.16 billion (€570 million) from Kingboard Chemical Holdings and associates, according to a statement, becoming Cathay's third-largest investor after local conglomerate Swire Pacific, with a 45 per cent holding, and Air China Ltd. with nearly 30 per cent.
Precisely how the dynamic between the two airlines in terms of future cooperation will look is yet to be seen. "Cathay Pacific is a fellow Oneworld member and is one of the strongest airlines in the world, respected throughout the industry with massive potential for the future". Cathay closed 1.5 per cent lower, while the broader Hong Kong market was flat. Earlier in the year, American Airlines rebuffed Qatar. 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.
"Cathay will have three major shareholders, all with different and potentially conflicting interests - Swire, Air China and Qatar Airways", said Ms Corrine Png, CEO of transport research firm Crucial Perspective.
Doha-based Qatar Airways has taken a 6.9% stake in Cathay Pacific.
Qatar and Cathay Pacific have worked together previously on the Hong Kong-Doha route.