Air China to acquire Cathay Pacific Airways.
Air China to acquire Cathay Pacific Airways.
Corporation China news story was the first to report it and created such interest that it crashed our website hosting servers.
Reliable sources at Cathay Pacific told Corporation China that Air China would acquire Cathay Pacific Airways.
The Announcement will only be released Tomorrow.
Corporation China tried to reach John Slosar, chairman of Cathay Pacific Airways, for comment but could not get a confirmation.
The History of Cathay Pacific is that American Roy C Farrell and Australian Sydney H de Kantzow founded Cathay Pacific Airways on 24 September 1946. Initially based in Shanghai, the two men eventually moved to Hong Kong and established the airline.
Air China owns 30% of Cathay Pacific and is said to obtain more shares from Swire, which owns 45% at present. Cathay just announced a major strategic review aftermarket today.*
Cathay said that as part of the plan, its flight operations unit would review its current structure to ensure it had a suitable model in place, something it said had not been looked at for many years.
It also addressed concerns that the strategy and reorganization were part of a plan to get the airline ready for sale to Air China, China’s flag carrier, which already owns a 29.99 percent stake. Cathay’s majority owner is Swire Pacific.Source :The National January 18, 2017 Updated: January 18, 2017 04:55 PM **
Air China to acquire Cathay Pacific 2018
Could a union between Beijing-based Air China (753. HK) and Hong Kong’s Cathay Pacific Airways (293. HK) be back on the horizon? updated 2018
Crucial Perspective founder and CEO Corrine Png is adamant that there is a possibility that Air China and Cathay Pacific Airways could merge. Air China owns 30% of Cathay Airways, and Cathay Airways owns 18% of Air China.
This merger would be beneficial to both airlines. It would expand Air China internationally and give Cathay Pacific Airways access to a premium breed of travelers. However, this year will likely have been the worst for Cathay since the Global Financial Crisis. It has lost shares to mainland rivals and suffers the hangover of a miscued fuel hedge. According to Png, Cathay will lose HKD 1.5 billion in 2017 and will not likely pay dividends.
Earlier this month, state-owned shipper COSCO acquired Hong Kong’s Orient Overseas for USD 6.3 billion. Kingboard Chemical Holdings built up an 8.3% shareholding in Cathay valued at about HKD 4 billion. The company’s intention is unknown, as it has no ties with the aviation industry. However, it could be a deal maker or breaker if Air China offers to buy Cathay.
Friend or Foe?
A flight to Los Angeles using Cathay Airways is 65% more expensive than Air China, offering economy tickets on the new Shenzhen-Los Angeles route for as little as HK$4,350 ahead of the Christmas holidays. Air China’s competitive pricing while being a shareholder in Hong Kon’s flagship airline makes one wonder if the airlines are foes or if this is the beginning of a relationship that could inevitably lead to an aviation marriage of convenience.
According to Png, Cathay’s second-largest shareholder only intends to make profits and eliminate domestic competition. China is road to becoming the world’s most significant air travel market by 2022, impressively overtaking the US.
Why should they merge?
According to Dr. Law Cheung-kwok, an aviation policy expert from the Chinese University of Hong Kong, the merger could imply the successful incorporation of two prominent airlines into one country. He believes Cathay would be more profitable and that Air China would benefit from its stake in one of Hong Kong’s core industries.
According to Png, Cathay would be sold to its Beijing cousin sooner rather than later.
Source* : reuters