In a move aimed at creating what is described as "one of the world's strongest airline groupings", Air China, Cathay Pacific and Dragonair have entered a new financial partnership. It sees Air China and its subsidiary, China National Aviation Company, increase their stake in Cathay to a combined 17.5%, while the Hong Kong-based carrier has doubled its holding in Air China to 20%. Cathay Pacific has also bought the remaining 82.21% of shares in Dragonair that it did not already own. In a new reciprocal sales agreement, Air China will be exclusively responsible for Cathay's sales in mainland China, with Cathay handling Air China's sales in Hong Kong, Macau and Taiwan. In addition, they will extend their code-share deal between Hong Kong and the mainland, introduce profit-sharing routes and establish a cargo joint venture in Shanghai, while maintaining Dragonair as a 'principal airline', operating as a stand-alone brand for at least six years.
In a statement, Cathay Pacific chief executive, Philip Chen, said that by taking full control of Dragonair and strengthening its partnership with Air China, it would reinforce Hong Kong's role as the premier aviation hub in the Asia/Pacific region and create one of the world's strongest airline groupings, based in Hong Kong.
“It will improve flight connectivity and route management, mean more destinations and greater travel choices for passengers, and strengthen both Hong Kong and Beijing as major aviation hubs,” he added.
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