Qatar Airways Interested In Boosting Cathay Pacific Stake

Reuters reports that Qatar Airways stands resolutely with Cathay Pacific, despite its embroilment in political unrest. Furthermore, if given the opportunity, the Qatari carrier wants to increase its stake in the buffeted Hong Kong airline.

Cathay airliner in flight
Qatar treads carefully in seeking an increase of its 10% Cathay stake. Photo: Cathay Pacific

Of his company’s association with Cathay, Qatar boss Akbar al Baker remains sanguine. At a recent function to announce the launch of flights between Doha and Langkawi, he reiterated Qatar’s stance. He said his company was proud of its affiliation with Cathay, adding that the carrier is also willing to become and even larger stakeholder than it already is.

Cathay’s image has taken a knock in recent weeks due to its being dragged into the region’s political crisis. Nevertheless, al-Baker remains optimistic and bullish. He told Reuters on Tuesday,

Cathay Pacific is there to stay, and to expand and to serve the people of both Hong Kong and China, as Hong Kong is an integral part of mainland China. We have no concern about the brand. We have no concern on the viability of the airline.”

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Qatar Airways owns a 10% stake in the Hong Kong flag carrier.

Suspensions of staff

In recent weeks Cathay has bowed to pressure from the Chinese government. The airline has been forced to take action against employees who are actively involved in Hong Kong’s ongoing civil unrest.

Yesterday (28/09/19), demonstrators gathered outside the headquarters of the airline’s biggest shareholder Swire Pacific Ltd to denounce Cathay’s firing of staff deemed to have joined recent anti-government demonstrations.

Cathay airline take-off
Cathay under fire for what some see as its bowing to Chinese pressure. Photo: Cathay Pacific

The recent sacking of a pilot was supposedly on the say-so of the Chinese aviation authority. According to The Guardian, the Authority had previous told the airline, “It would have to remove any staff involved in or supportive of protests from flights over its airspace.

But in a statement following the suspension, the airline told The Guardian that the dismissal was not related to the pilot’s union activities. A spokesperson said the carrier, “Upheld Hong Kong’s rights and freedoms but had a zero-tolerance approach to any support for or participation in illegal protests, violent activities or overly radical behaviour”.

Cathay is now running a damage limitation program, in an attempt to assure the world that it is not a puppet of the Chinese state. But it is clearly being squeezed by both the demands of its union workforce and the Chinese aviation authority.

Qatar unfettered

Qatar Airways for now at least seems untroubled by the general complaints of Cathay’s bowing to pressure. Furthermore, its willingness to increase its stake is telling of al Baker’s continued belief that the carrier is a going concern and will ride the storm.

Cathay airline on taxiway
Qatar is untroubled by Cathay’s rough ride, at least in public. Photo: Cathay Pacific

However, there are several obstacles in the way of Qatar’s plans for a bigger bite of the cherry. Not least of all is the unwillingness of both Air China and Swire to relinquish some of their shares.

But perhaps more crucial to Qatar’s long-term ambitions is its helping to navigate, at least tacitly, Cathay’s route through the turbulence. China is one of Qatar’s biggest customers of natural gas. To keep China on side may prove an irresistible motivation in future dealings between state-owned Qatar and eager-to-please Cathay.

And al Baker will be all too aware of the need to carefully steer his company’s commercial interests along the rocky shores of the Gulf state’s political alliance with the red giant.

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