Cathay Pacific Airways, Asia’s biggest international carrier, is studying a bid for stakes in two smaller Hong Kong airlines backed by embattled Chinese conglomerate HNA Group, people with knowledge of the matter said.
Cathay Pacific has held preliminary talks with HNA about acquiring minority stakes in Hong Kong Express Airways and Hong Kong Airlines, according to the people. A couple of local tycoons have also been considering investments in Hong Kong Airlines, one of the people said, asking not to be identified because the information is private.
Hong Kong Airlines and Hong Kong Express would be attractive because of the routes they have the rights to fly, the people said. The suitors’ discussions with HNA have been progressing slowly, and there’s no certainty they will result in a transaction, according to the people.
Cathay Pacific has fired at least 600 workers and pared back some of its overseas operations after wrong-way bets on fuel hedges drove the company into losses. The carrier has also been facing intensifying competition from budget airlines as well as from Middle Eastern rivals offering ultra-luxury amenities.
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