Cathay Pacific Airways has acquired from casino magnate Stanley Ho Hung-sun's Shun Tak Holdings the remaining 25 per cent of Air Hong Kong (AHK) it did not already own in an all-cash deal worth HK$194 million. Cathay said it made the acquisition to position itself to 'take advantage of good business prospects in the longer term'. It said it planned to make AHK, a Hong Kong-based cargo carrier with a fleet of three leased Boeing 747-200 freighters, a wholly owned subsidiary. 'Cathay has always promoted Hong Kong as Asia's leading logistics hub,' Cathay chairman James Hughes-Hallett said. 'Making AHK a wholly owned subsidiary underlines that commitment. 'Although there is currently a surplus of capacity in the air-cargo market, Cathay sees this as an opportunity to invest in the future and position itself to take advantage of an upturn in the market when economic conditions improve.' Cathay first became involved in AHK in 1994, when it outbid China Southern Airlines to rescue the failing carrier. At the time, Cathay paid HK$200 million for a 75 per cent stake. The acquisition was made in an effort to end a crippling price war on the air-cargo services market between Hong Kong and Europe, which was hurting both AHK and Cathay. It was also done to prevent China Southern and other mainland interests from gaining a beachhead in the Hong Kong aviation market, a strategy also evident in Cathay's bailout of Dragonair. At the time, AHK operated four Boeing 747 freighters largely to Europe and Britain. While small, it had become a major source of irritation to Cathay, which was losing a large share of its cargo on these routes. Analysts said Cathay had never shown much commitment to developing AHK as its cargo arm. Since purchasing AHK, Cathay has continued to expand a separate freighter fleet of its own, which now includes five Boeing 747-400 and seven 747-200 aircraft. 'I wouldn't be surprised if they just get rid of the AHK name somewhere down the line,' an analyst said. AHK operates scheduled services from Hong Kong to Japan, South Korea, Europe and the Middle East with freighters leased from Cathay.