It was a marriage made in the rarified atmosphere of 30,000 feet. On Wednesday, Hong Kong flag carrier Cathay Pacific announced it would buy budget airline HK Express for US$628.15 million.
The decision was made to counter competition from the increasing number of low-cost carriers in the region.
The HK$4.93 billion acquisition leaves Cathay in control of three of the four airlines in Hong Kong, adding to its namesake carrier and regional subsidiary Cathay Dragon.
As for the details of the deal, Cathay will pay HK$2.25 billion in cash for HKE, and issue HK$2.68 billion in promissory loan notes, the company said in an official filing to the Hong Kong Stock Exchange.
The takeover should be completed by December, according to the filing.
“The transaction is expected to generate synergies as the businesses and business models of Cathay Pacific and HKE are largely complementary,” Cathay said in the filing.
Cathay shares rose 2.78% to HK$14.06 in Hong Kong trading shortly after the market opened.
HKE is the city’s sole budget carrier – a sector of the industry that a marquee brand like Cathay has struggled to compete against.
Still, what is interesting is that the budget airline was owned by the HNA Group, a struggling Chinese conglomerate that has been looking to lower its mountain of debt.
The company also owns Hong Kong Airlines, another Cathay competitor that has found itself in financial difficulties.
During the past 18 months, Cathay has been overhauling its business after posting its first losses for eight years in 2016.
Part of the restructure included firing more than 600 workers and paring overseas offices and crew stations as it faces stiff competition from mainland Chinese carriers.
Earlier this month, Cathay announced a net profit of HK$2.35 billion ($299 million) for 2018, ending two successive annual losses.
– reporting from AFP
I’m not sure where you’re getting your info, but good topic.
I needs to spend some time learning more or understanding more.
Thanks for excellent information I was looking for this info for my mission.
This is my first time pay a visit at here and i am really pleassant
to read all at alone place.
That is a great tip particularly to those fresh to the blogosphere.
Simple but very accurate info… Many thanks for sharing this one.
A must read article!
I am really impressed with your writing skills and also
with the layout on your weblog. Is this a paid theme or did you customize it yourself?
Either way keep up the nice quality writing, it’s rare to see a
great blog like this one today.
Ahaa, its pleasant dialogue concerning this paragraph at this place at this weblog, I
have read all that, so at this time me also commenting here.
Hi to every body, it’s my first pay a quick visit of this web site;
this weblog contains awesome and truly fine information for visitors.
Excellent write-up. I certainly love this site.
Stick with it!
Hi there, always i used to check webpage posts here
early in the morning, as i like to find out more and more.
Do you have a spam problem on this site; I also am a blogger, and I was wondering your situation; we have developed
some nice practices and we are looking to trade solutions
with other folks, be sure to shoot me an e-mail if interested.
Everything is very open with a clear explanation of the challenges.
It was really informative. Your website is very useful. Thanks
for sharing!
Hey there just wanted to give you a quick heads up and let you know a few of the images aren’t loading properly.
I’m not sure why but I think its a linking issue.
I’ve tried it in two different web browsers and both show the same results.
“Say, you got a nice article. Really Great.”
You actually make it seem so easy with your presentation but I
find this topic to be really something which I
think I would never understand. It seems too complicated and extremely broad for me.
I am looking forward for your next post, I will try to get the
hang of it!
Thanks so much for the blog post.Really thank you! Keep writing.
It is appropriate time to make some plans for the future and it is time to
be happy. I’ve read this post and if I could I desire to suggest you few interesting things or
suggestions. Perhaps you could write next articles referring to this article.
I wish to read even more things about it!
Thanks a bunch for sharing this with all of us you actually understand what you
are speaking about! Bookmarked. Kindly additionally talk over with my site =).
We can have a hyperlink exchange agreement among us
Hi to all, the contents present at this web page are genuinely amazing for people
knowledge, well, keep up the good work fellows.
Hello There. I found your blog using msn. This is a really well written article.
I will make sure to bookmark it and return to read more of your useful information. Thanks for the post.
I will definitely return.
Im obliged for the blog article.Thanks Again.