Qatar Airways to buy almost 10% of Cathay

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Qatar Airways will purchase 9.61% of Hong Kong airline Cathay Pacific.

Qatar Airways Group chief executive, Akbar Al Baker, said, "Qatar Airways is very pleased to complete its financial investment in Cathay Pacific". Air China Limited and Swire Pacific Limited together continue to hold 74.99 percent shares of the airline. It also comes amid a Saudi Arabia-led blockade of Qatar that has led some flights to be scrapped and forced others to divert.

It's a move that appears to signal the Qatar carrier's confidence in the Hong Kong airline's ability to rebound from its recent financial struggles, largely the result of increasing competition from the Middle Eastern airlines as well as mainland Chinese and low-priced carriers. Qatar owns slightly more than 20% of IAG, the parent of British Airways, Iberia, Aer Lingus, Vueling and Level; 10% of South America's LATAM Airlines Group; and 49% of Italian carrier Meridiana.

Cathay shares fell 1.5 per cent on Monday, while the benchmark Hang Seng Index finish almost unchanged.

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Both Cathay Pacific and Qatar Airways collaborate together as members of the Oneworld alliance.

Cathay flew between Hong Kong and Qatar Airways' Doha hub as part of a codeshare arrangement between 2014 and 2016. On Monday, Air China said that it looked at the purchase by Qatar Airways in Cathay as positive and it hoped shareholders would work to find synergies. The route was axed "for commercial reasons".

Cathay posted a wider than expected loss of HK$2.05 billion in the first half because of fierce competition in the aviation industry.

In particular, the rapid growth of Chinese carriers on global routes has reduced the number of passengers from China transiting through Cathay's Hong Kong hub.