Qatar Airways boss eyes bigger investment in Cathay Pacific
Akbar Al Baker says Gulf firm would be happy to own more of Hong Kong’s flagship carrier to increase its toehold in world’s largest air travel market
Qatar Airways is hoping to have an even bigger share in Cathay Pacific Airways, just days after it reached a deal to buy a minority stake in one of Asia’s biggest international airlines.
Akbar Al Baker, the Doha-based carrier’s group CEO, said he had wanted to buy more than the 9.6 per cent that he acquired for HK$5.16 billion (US$662 million) but “that was all that was on offer”.
“Yes we would have like to have bought more. But unfortunately nothing more was available,” he said.
“If there is more [to be bought] and we are within the regulatory framework, yes Qatar Airways would be interested.”
But he quashed suggestions the Gulf carrier was looking to play an active part in Cathay Pacific’s day-to-day business, insisting his firm was only aiming for a supportive role in the company.
“We don’t interfere in the airlines in which we take a stake,” he said. “We are very passive. But what we do is support in any way we can, to bring synergies and economies of scale to our partners.”
The Middle East airline agreed on Monday to buy the stake in the loss-making carrier from Hong Kong industrial company Kingboard Chemical, making it the third largest shareholder after Swire, the London-based conglomerate, with 45 per cent, and Air China, with 29.9 per cent.
Cathay Pacific now has a rich ally in Qatar Airways. As mainland rivals partner with other major carriers, the Hong Kong-based airline looks far less isolated.
American Airlines, one of Cathay’s collaborators, partnered with nearby rival China Southern Airlines from Guangzhou in a US$200 million deal earlier this year. Shanghai-based China Eastern, Delta Air Lines and Air France-KLM sealed an equity partnership earlier this year.
Speaking to the Post on the sidelines of an industry summit in Singapore, Baker said the acquisition made sense for Qatar.
“The acquisition also gives us a small investment in Air China. We see China as one of largest aviation markets and Air China is one of the largest and established airlines in the country,” Baker said, adding that the company was not looking for further acquisitions.
He said Cathay was a well-run airline with huge potential.
Baker’s deal brings him closer to creating a global airline group that would be able to share the costs of purchasing fuel, ground handling, repairs and maintenance, and aircraft purchases.
Qatar’s empire now spans four airlines in seven countries and territories across three continents, including 20 per cent of British Airways owner International Airlines Group, 10 per cent of South America’s leading carrier LATAM, and 49 per cent of Italian airline Meridiana.
The Gulf carrier is also planning to start a new airline in India, another rapidly growing market.
The purchase gives Qatar a toehold in the region for the first time, cementing its efforts to build a presence in the world’s largest air travel market.
China is set to overtake the United States as the biggest air travel market within five years, and airlines will carry 2.1 billion new passengers from the region in the next two decades, according to industry projections.
Aaron Low is reporting from Singapore