AviationAhead of profit announcement, CX mulls low-cost airline investment.

Cathay in talks to buy a slice of Hong Kong Express

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Cathay says it is in ‘active’ discussions about an investment in HK Express.
Cathay says it is in ‘active’ discussions about an investment in HK Express.

HNA has been trimming one of China’s biggest debt piles by selling assets from hotels to stakes in aircraft-leasing companies. 

Cathay Pacific Airways Ltd. is in talks to buy shares in Hong Kong’s only budget airline from Chinese conglomerate HNA Group Co.

HNA has been trimming one of China’s biggest debt piles by selling assets from hotels to stakes in aircraft-leasing companies. 

The conglomerate has also been trying to sell almost a third of its stake in Hong Kong Airlines, a plan that was held up last year after the sudden death of HNA co-chairman Wang Jian, Bloomberg News reported in August.

Hong Kong Express, which started services in October 2013, operates a fleet of Airbus SE A320 family aircraft. It flies to cities in countries including China, South Korea, Japan and Vietnam.

According to Cathay Pacific, announced to the Hong Kong Exchange Tuesday, “The company hereby confirms that the company is in active discussions about an acquisition involving HKE.”

Cathay announced on February 20 it expects a turnaround from its back-to-back losses with a net profit of US$295 million for 2018 following its “transformation programme”. Full details of its profit performance are expected to be revealed next week.

Preliminary talks were held at the end of last month with Cathay Pacific discussing the acquisition of minority stakes in both Hong Kong Express - the city’s only low-cost airline- and Hong Kong Airlines. 

Discussions, but no agreement and no certainty so far. And Tuesday’s news did not include the financially struggling Hong Kong Airlines.

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