Air China to sell 1.61% stake in Cathay Pacific for US$170 million
A Cathay Pacific aircraft taxis at Hong Kong International Airport in Hong Kong on Nov 25, 2022. (File photo: AP/Vernon Yuen)
HONG KONG: China's flagship carrier Air China said on Tuesday (Jan 6) it would sell 108.1 million shares, representing about a 1.61 per cent stake in Cathay Pacific Airways for a total of HK$1.32 billion (US$169.57 million).
After completing the sale, Air China will hold around a 27.11 per cent stake in Cathay Pacific, though that will rise to 29.98 per cent after the Hong Kong carrier completes a planned buyback of a stake owned by Qatar Airways.
Swire Pacific will remain the largest shareholder with a 47.65 per cent stake after the buyback.
Cathay Pacific Airways CEO Ronald Lam said on Tuesday that Air China's decision was a "tactical" move.
"I understand this is only tactical. Air China will remain our long-term strategic shareholder. I think that is for sure," Lam told reporters at an event to mark Cathay Pacific's 80th anniversary.
Air China said in a statement its shareholding in Cathay will be maintained "at an appropriate level" and it remained optimistic about the Hong Kong airline's prospects.
As part of celebrations to mark eight decades of operations, Lam announced the return of the airline's iconic green-and-white livery on one of its Airbus A350 passenger jetliners and a Boeing 747 used for cargo.
The classic colouring is widely known as the "lettuce leaf sandwich" and was introduced in the 1970s and used until the early 1990s.
"This will bring back a lot of fond memories among many Hong Kong people who have travelled with us," Lam said.
The airline does not plan to add too many new destinations this year but will increase the frequency on existing routes, he added.
Shares of Cathay Pacific, which have jumped more than 35 per cent over the past year, were down about 2 per cent on Tuesday.
The airline said last month it would appoint Swire Pacific Chairman Guy Bradley as its new chair in May, replacing Patrick Healy.
Cathay Pacific also said it expected strong second-half financial results, with its 2025 full-year earnings set to exceed the HK$9.89 billion profit reported in 2024.
