Qatar Airways announced its plans to purchase a nearly 10% stake in Hong Kong airline Cathay Pacific.
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Hong Kong’s Kingboard Chemical Holdings said it sold its 9.61% stake (378,188,000 shares) in Cathay to Qatar Airways for $661 million, according to Reuters. Once the deal is complete, Qatar would become the third-largest shareholder in the airline.
“This investment further supports Qatar Airways investment strategy which already includes 20% investment in International Airlines Group, 10% investment in LATAM Airlines Group and 49% investment in Meridiana,” Qatar Airways Group CEO Akbar Al Baker said in a statement.
In June, Qatar Airways announced its intentions to purchase a 10% stake worth $808 million in American Airlines (NYSE:AAL). The bid was not warmly received by the U.S. air carrier, with its chief executive showing a clear lack of enthusiasm upon learning of Qatar’s plans.
“We aren’t particularly excited about Qatar’s outreach, and we find it puzzling,” American Airlines CEO Doug Parker said in a statement to employees in June.
In early August, Qatar dropped the proposal, saying the investment “no longer meets” its corporate objectives.
The announcement came at a time when American, along with Delta (NYSE:DAL) and United (NYSE:UAL), alleged that Qatar, as well as other Gulf region carriers Etihad and Emirates, receive unfair subsidies from their governments.
Qatar still faces a blockade by its Gulf region neighbors Saudi Arabia, Bahrain, Egypt and the United Arab Emirates cut diplomatic ties with the airline’s home country—including halting air traffic—over its alleged support of terror groups, which is expected to cost the airline this year.