Hong Kong’s Cathay Pacific, which is one of the largest airlines in Asia, announced on Wednesday that plans to buy Hong Kong Express, a local low-cost carrier, from the Chinese conglomerate HNA Group. This is stated in a message distributed on the Hong Kong Stock Exchange. Hong Kong Express, which flies to destinations across Asia, will become a wholly-owned subsidiary of Cathay Pacific.
The amount of the transaction will be 4.93 billion HKD (628 million USD).
It is assumed that the transaction will be closed before the end of the year. As a result, Cathay Pacific will gain control of the three of the four airlines based in Hong Kong.
“We intend to continue to operate Hong Kong Express as a stand-alone airline using the low-cost carrier business model”, said a statement of the Cathay Pacific in a statement.
Cathay Pacific recently announced a profit of 298.7 million USD in 2018, compared with a loss of 160.4 million USD a year earlier. As for Hong Kong Express, it completed the past year with a loss of 18 million USD.
Cathay Pacific and Cathay Dragon carried more than 35 million passengers last year and currently operate a combined fleet of 203 airplanes, consisting of 23 single-aisle, 159 wide-body, and 21 freighter aircraft.
Shares of Cathay Pacific on the Hong Kong Stock Exchange on Wednesday went up by 2%.
