Hong Kong-based Cathay Pacific has entered into a HK$4.93bn share purchase agreement to buy 100% of low-cost carrier Hong Kong Express Airways (HKE) from HNA Group, the Chinese conglomerate.
The passenger and cargo giant said that the total consideration comprises of HK$2.25bn in cash and a non-cash component of HK$2.68bn.
The transaction is expected to complete on or before 31 December 2019, when HKE will become a wholly owned subsidiary of Cathay Pacific.
Said a Cathay spokesperson: “The transaction is expected to be good for the travelling public, good for the Hong Kong hub and good for the Cathay Group as Cathay Pacific and HKE’s respective businesses and business models are largely complementary.
“We intend to continue to operate HK Express as a stand-alone airline using the low-cost carrier business model.”
The statement continued: “HKE captures a unique market segment and together with the extensive network of the Cathay Group could multiply connection opportunities through Hong Kong.
“This represents an attractive and practical way for the Cathay Group to support the long-term development and growth of our aviation business and to enhance the competitiveness of the Hong Kong hub during a time of intense regional competition."
