Cathay Pacific to purchase funds airline Hong Kong Categorical

A Cathay Pacific passenger plane prepares to take off from Hong Kong's international airport on March 13, 2019Picture copyright
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Cathay Pacific will purchase low-cost service Hong Kong Categorical for $four.93bn Hong Kong ($628m).

The acquisition will likely be made in money and thru promissory mortgage notes, the corporate mentioned in a inventory submitting.

Hong Kong Categorical, which flies to locations throughout Asia, will turn into a wholly-owned subsidiary of Cathay Pacific.

Cathay Pacific has been overhauling its enterprise to chop prices, and returned to revenue in 2018.

“We intend to proceed to function Hong Kong Categorical as a stand-alone airline utilizing the low-cost service enterprise mannequin,” a Cathay Pacific spokesperson mentioned in a press release.

Hong Kong Categorical captures “a novel market phase” the spokesperson mentioned, including that the deal “represents a horny and sensible means for the Cathay Group to help the long-term growth and development of our aviation enterprise”.

The transaction is anticipated to be accomplished by the top of the yr.

Turnaround plan

Cathay Pacific returned to revenue final yr after two years of losses, after launching a cost-cutting programme.

The airline has been struggling towards competitors, significantly from low-cost Chinese language carriers protecting Hong Kong, mainland China and South East Asia.

Final yr, it additionally turned topic of a knowledge breach in its IT techniques, jeopardising the non-public data of as much as 9.four million passengers.

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