Qatar Airways buys stake in Cathay Pacific

Hong Kong's Kingboard Chemical Holdings on Monday said it had agreed to sell its 9.6 per cent stake in Cathay Pacific Airways to Middle Eastern carrier Qatar Airways for HK$5.16 billion (US$661 million).

Kingboard, an investment holding company, said it would recognise a gain of HK$800 million on the sale which represented its entire stake in the Hong Kong airline.

Cathay shares have risen by 29.4 per cent since the start of January despite the airline in August posting its worst first-half loss in 20 years, says a report in CNBC.

The Hong Kong airline has a highly concentrated share register with Swire Pacific owning 45 per cent and Air China holding 30 per cent.

This is not the first time Qatar Airways has taken a stake in another airline. The carrier owns 20 per cent of International Consolidated Airlines Group, the parent of British Airways, as well as 10 per cent of South America's LATAM Airlines Group and 49 per cent of Italy's Meridiana.

Qatar Airways and Cathay are both members of the one-world alliance, as is British Airways and LATAM.

The Qatari carrier in August dropped plans to build a stake of up to 4.75 per cent in American Airlines Group.

Those investment plans were met with suspicion by critics at a time when Qatar is embroiled in the region's worst diplomatic crisis in years and is locked in an airspace rights dispute with three other Gulf states.