Qatar Airways will sell its entire 9.57% stake in Cathay Pacific Airways for $896 million, concluding an eight-year investment in the Hong Kong-based carrier. Cathay Pacific announced on Wednesday that it would repurchase the shares, a move that was met with positive market sentiment, prompting its stock to climb 4.2% in Hong Kong trading the following day. The transaction, which marks a significant shift in their partnership, is still subject to approval from shareholders.
A Signal of Confidence from Cathay Pacific
For Cathay Pacific, the share buyback is a clear signal of its renewed strength and optimism. Group chairman Patrick Healy stated the decision shows “strong confidence in the future of the Cathay Group.” He also emphasised that it reinforces the airline’s commitment to bolstering Hong Kong’s crucial role as a global aviation hub. By reacquiring the stake, Cathay can consolidate its ownership structure as it builds on its successful post-pandemic recovery and charts its future course.
Qatar Airways’ Disciplined Divestment
From Qatar Airways’ perspective, the sale represents a calculated financial decision designed to capitalise on its investment. CEO Badr Mohammed al-Meer, speaking through Cathay’s official release, described the divestment as a “disciplined approach to portfolio management.” This move comes after a period of record profitability for the state-owned airline and is part of a wider strategy to optimise the group’s investments for sustained long-term growth. This disciplined financial approach extends beyond aviation, as Qatar continues to foster growth in key sectors like fintech.
A Profitable Eight-Year Partnership
The deal concludes a partnership that began in 2017 when Qatar Airways acquired its Cathay Pacific stake for approximately $662 million. The initial investment was made when the Hong Kong airline was navigating significant financial difficulties and implementing widespread cost-cutting measures. The holding has since proven to be a profitable venture for the Qatari carrier, which is now exiting its position at a substantial gain. The timing reflects Cathay Pacific’s impressive turnaround; the airline reported a $1.2 billion profit in its last fiscal year after years of challenges.
Both airlines have demonstrated remarkable resilience, recovering strongly from recent global disruptions. Qatar Airways, which earned $2.15 billion in profit last year, has successfully moved past the challenges of the COVID-19 pandemic and a previous regional blockade that restricted its flight paths. The sale of its Cathay stake is a specific portfolio adjustment, not a withdrawal from global aviation partnerships. The Doha-based carrier continues to hold significant investments in other major airlines, including International Airlines Group (IAG), LATAM Airlines, Virgin Australia, and China Southern Airlines.
