Qatar Airways investments equal almost 10 percent of Cathay Pacific ownership

Qatar Airways will buy a near 10% stake of Cathay Pacific for HK$5.6bn ($662m; £506m), giving the Middle Eastern airline more access to China's lucrative aviation market.

Separately, Qatar Airways chief executive Akbar Al Baker said: "Qatar Airways is very pleased to complete its financial investment in Cathay Pacific".

After falling almost 5%, Cathay Pacific's shares trimmed losses and were down around 1.5% in afternoon trading in Hong Kong. According to Reuters, Qatar Airways bought roughly 378 million of Cathay Pacific's shares from Hong Kong's Kingboard Chemical Holdings for about US$661 million.

Without having domestic flights as a way to underpin its earnings, carriers in Asia such as Singapore Airlines and Cathay has struggled against Middle East and Chinese rivals, as Cathay already has shed over 600 jobs over the last six months.

For state-owned Qatar Airways, its first major stake in an Asian airline will allow it to boost its global influence and potentially increase traffic through its Doha hub, amid the worst political crisis in years among the Gulf Arab states.

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Since June, Qatar has been isolated by neighbouring countries including Saudi Arabia and the United Arab Emirates.

Cathay Pacific chief executive Rupert Hogg said as members of the Oneworld alliance, "we look forward to a continued constructive relationship".

Doha-based Qatar Airways has taken a 6.9% stake in Cathay Pacific. The company also owns 20 per cent of International Airlines Group, which controls European carriers Aer Lingus, Iberia and Vueling; 10 per cent of Chile's Latam Airlines Group; and 49 per cent of Meridiana, Italy's second-biggest carrier.

Swire Pacific holds a stake of 45% in Cathay, while Air China has 30%.

  • Rita Burton