Cathay to buy Hong Kong’s budget carrier

Bloomberg

Cathay Pacific Airways Ltd agreed to buy Hong Kong’s only budget carrier to expand into the no-frills market, the South China Morning Post said, citing sources familiar with the matter.
An announcement on the acquisition of Hong Kong Express Airways Ltd was expected to be made on Tuesday, the report said, adding that the sources didn’t elaborate on details including financial terms. Cathay shares rose as much as 3.3 percent to HK$13.76 in early trading in Hong Kong.
A Cathay representative declined to comment. Cathay said earlier that it’s in “active discussions” with HNA Group Co about an acquisition involving Hong Kong Express. HNA declined to comment.
Cathay is embracing a market segment it previously rejected, partly because demand on some of its routes has switched to budget carriers. The Asia Pacific region’s burgeoning market will probably see the largest increase in air traffic worldwide, with almost 4 billion passenger journeys expected in the next two decades.
Cathay is on the last leg of a three-year transformation programme to turn its fortunes around amid increasing competition from China and budget carriers.

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