Cathay buys Dragonair
Cathay Pacific Airways confirmed on Friday that it is paying HKD$8.22 billion in cash and shares to take over its rival Dragonair.
As part of the deal, Cathay and mainland carrier Air China will increase their cooperation, with Cathay paying HKD$4.07 billion to double its stake in Beijing-run Air China to 20 percent and in turn, Air China will pay HKD$5.39 billion for 10% of Cathay.
The long-expected deal will expand Cathay, the world’s seventh most valuable airline and give it access to the fast-growing mainland Chinese market, its limited position in mainland China, having frustrated the airline where its only passenger routes are to Beijing and Xiamen.
Dragonair, which flies to 23 mainland cities including the lucrative Shanghai market, has in turn relied on Cathay to feed it international traffic bound for China. “It is positive for all parties involved,” said Peter Drolet, senior analyst at UOB Kay Hian. “Gaining China access will give unlimited possibilities to Cathay Pacific, and I believe Cathay will have the ability to turn around any unprofitable routes that Dragonair currently has and reduce its costs significantly.”
Cathay Pacific and Air China said they planned to set up a jointly owned cargo airline based in Shanghai, to be held 51 percent by Air China and 49 percent by Cathay. The companies also said that Dragonair would keep its current branding for six years.
The tie-up creates a formidable rival for mainland carriers China Southern Airlines and China Eastern Airlines, and forms a powerhouse in the lucrative market between Taiwan and mainland China through Hong Kong, as there are no direct air links between China and Taiwan.
Report by The Mole
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Airbnb eyes a loyalty program but details remain under wraps
Airlines suspend Madagascar services following unrest and army revolt
Qatar Airways offers flexible payment options for European travellers
Air Mauritius reduces frequencies to Europe and Asia for the holiday season
Major rail disruptions around and in Berlin until early 2026