Air China’s Cathay Sale Signals Portfolio Cleanup Not Strategic Split

Air China has completed a partial divestment of its stake in Cathay Pacific Airways, selling 108.08 million shares, equivalent to 1.6 percent of the airline. Following the sale, Air China’s ownership in Cathay Pacific decreased from 28.7 percent to 27.1 percent, resulting in a pre-tax profit of CNY182 million (US$26 million).

The transaction was executed through Morgan Stanley at a price of HK$12.22 (US$1.57) per share, generating total proceeds of HK$1.32 billion (US$170 million).

Strategic context

Cathay Pacific Group CEO Ronald Lam said the sale reflects routine portfolio management by Air China’s subsidiaries and does not signal any change in strategic alignment.

According to Lam, the transaction has no impact on governance structures, board representation, or operational cooperation between the two carriers, which continue to work together across multiple commercial areas.

Supporting Cathay’s share buyback

The divestment also supports Cathay Pacific’s ongoing share buyback of Qatar Airways’ 9.57 percent stake, valued at HK$6.97 billion (US$890 million). By reducing its holdings ahead of the buyback, Air China ensures its post-transaction ownership remains below Hong Kong’s 30 percent mandatory general offer threshold, settling at 29.98 percent.

As a result of the transaction, Swire Pacific’s ownership in Cathay Pacific increases to 47.7 percent.

Recently, Air China placed an order for 60 Airbus A320neo-family aircraft, with a total list price value of approximately $9.5 billion. The new aircraft are expected to improve fuel efficiency and support sustained growth in passenger demand across domestic and regional networks.

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