HONG KONG: Cathay hopes to raise stake in Air China
Cathay Pacific Airways hopes to further raise its stake in Chinese flag carrier Air China, chief executive Tony Tyler said recently according to Dow Jones, although he noted the companyÃ¢â‚¬™s plans will be limited by the free float requirements for listed companies. The Hong Kong-based carrier has in recent weeks bought additional Hong Kong-traded shares […]
July 1, 2010
The Hong Kong-based carrier has in recent weeks bought additional Hong Kong-traded shares in Air China, to reduce the diluting effect on its stake after Air China completes its planned issuance of new shares in Hong Kong and China.
Meanwhile, European regulators gave Cathay Pacific the green light to acquire a stake in Air ChinaÃ¢â‚¬™s cargo unit, saying the deal would not hurt competition in Europe. Hong Kong carrier Cathay Pacific had announced in February that it would form a joint venture with Air China to capture the lucrative air cargo business in two top Chinese manufacturing centres.
The European Commission concluded that the combined market share of Air China and Cathay Pacific on the routes between Asia and Europe was Ã¢â‚¬Å“limited.Ã¢â‚¬Â The competition watchdog added that Ã¢â‚¬Å“competition on this market will remain strong after the transaction, notably due to the presence of many large international airline companies active on the same routes.Ã¢â‚¬Â
Under the deal, Cathay would acquire a 49-per cent stake in Air China Cargo (ACC), the platform for the joint venture, for 1.7 billion yuan (US$250 million), the Hong Kong company has said, with the joint venture airline expected to begin operations in the coming months.