Qatar Airways buys 9.6 percent stake in Cathay Pacific

A Qatar Airways plane takes-off from the Hamad International Airport in Doha

The deal with Cathay Pacific comes during the ongoing political crisis in the Gulf and after Qatar Airways halted a bid in August to buy a 10 percent stake in American Airlines.

It's a move that appears to signal the Qatar carrier's confidence in the Hong Kong airline's ability to rebound from its recent financial struggles, largely the result of increasing competition from the Middle Eastern airlines as well as mainland Chinese and low-priced carriers.

Qatar Airways will purchase the stake for HK$5.16 billion (€570 million) from Kingboard Chemical Holdings and associates, according to a statement, becoming Cathay's third-largest investor after local conglomerate Swire Pacific, with a 45 per cent holding, and Air China Ltd. with nearly 30 per cent.

Cathay Pacific chief executive Rupert Hogg said as members of the Oneworld alliance, "we look forward to a continued constructive relationship". Earlier in the year, American Airlines rebuffed Qatar.

"This investment further supports Qatar Airways investment strategy which already includes 20% investment in International Airlines Group, 10% investment in LATAM Airlines Group and 49% investment in Meridiana".

Cathay shares fell 3.9 percent by mid-morning in Hong Kong, to HK$12.68.

Earlier this year it made a bid to buy 10 percent in American Airlines, the United States' largest carrier, but the deal went sour and Qatari officials eventually said that "it no longer met" Qatar Airways' goal. It added that Qatar's purchase displays confidence in Cathay's future.

Cathay flew between Hong Kong and Qatar Airways' Doha hub as part of a codeshare arrangement between 2014 and 2016.

However, Cathay discontinued its Doha service less than two years later, saying at the time it was for "commercial reasons".

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