Qatar Airways to sell its holdings in Hong Kong's Cathay Pacific for $896 million

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DUBAI, United Arab Emirates (AP) — Qatar Airways will sell its stake in Hong Kong-based Cathay Pacific Airways in a share buyback valued at $896 million, the companies announced, ending the Qatari carrier's eight-year involvement with the airline.

The announcement came late Wednesday in a stock market filing by Cathay Pacific, which saw its shares gain 4.2% on the Hong Kong Stock Exchange on Thursday.

Under the agreement, Qatar Airways will sell all of its holdings, which represent 9.57% of Cathay Pacific stock. The airline's other major shareholders are Swire Pacific and Air China. The plan is subject to shareholder approval.

“The buy-back reflects our strong confidence in the future of the Cathay Group and underscores our commitment to the development of the Hong Kong international aviation hub," Cathay Group chairman Patrick Healy said in a statement announcing the sale.

Qatar Airways, a state-owned airline flying out of the sprawling Hamad International Airport in Doha, did not acknowledge the sale itself. However, the Cathay Pacific statement included a comment from its CEO Badr Mohammed al-Meer saying the move represented the airline's “disciplined approach to portfolio management and our commitment to delivering sustainable value for our shareholders.”

"Following a period of record profitability and strong performance, this decision is part of a proactive strategy to optimize our investments and position the group for long-term growth," al-Meer said. Qatar Airways did not respond to a request for comment from The Associated Press on Thursday.

Qatar Airways bought its stake in Cathay Pacific in 2017 in a deal valued at the time around $662 million. Back then, Cathay Pacific faced financial losses and layoffs amid increasing competition from other airlines. The Hong Kong carrier posted a $1.2 billion profit in the last fiscal year.

Qatar Airways, along with Abu Dhabi-based Emirates and Dubai’s Emirates, are long-haul carriers that link East-West travel. Their location on the Arabian Peninsula between Europe and Asia have made them a key link in global transit. Qatar Airways also got a boost when the small, energy-rich nation hosted soccer’s 2022 FIFA World Cup.

Qatar Airways had struggled during a yearslong boycott by four Arab nations and the coronavirus pandemic. However, it soared to a $2.15 billion profit in its last fiscal year. Qatar Airways also has holdings in International Airlines Group, LATAM Airlines Group, China Southern Airlines, Virgin Australia and South Africa's Airlink.