Qatar Airways buys 9.6 percent stake in Cathay Pacific

Qatar Airways is buying almost 10 per cent of Hong Kong carrier Cathay Pacific Airways for about $662 million, the companies said Monday, in a deal making it Cathay's third-biggest shareholder.

Despite the troubles Cathay has experienced, CEO of Qatar Airways Akbar al-Baker called it one of the strongest air carriers in the world, with huge potential over the long term. The investment in Cathay Pacific comes about three months after Qatar Airways said it had ended plans to acquire 10 percent of American Airlines, after that plan was met with resistance in the United States. Cathay closed 1.5 per cent lower, while the broader Hong Kong market was flat.

Qatar Airways bought the shares from Hong Kong's Kingboard Holdings, according to a stock exchange filing by the company, which makes circuit boards and invests in property.

Qatar Airways has been trying to compensate for this lost traffic and revenue by increasingly looking at worldwide markets to expand its reach.

Cathay Pacific chief executive Rupert Hogg said as members of the Oneworld alliance, "we look forward to a continued constructive relationship". It added that Qatar's purchase displays confidence in Cathay's future.

Qatar Airways already has a 20% investment in International Airlines Group (IAG) - the owner of Aer Lingus.

Cathay did not put out a statement, but tweeted that the Swire Group and Air China continue to hold 74.9% of the airline.

However, Cathay discontinued its Doha service less than two years later, saying at the time it was for "commercial reasons".

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.