Cathay Pacific Close To Dragonair Takeover

[JohnK]

Cathay Pacific Close To Dragonair Takeover
June 5, 2006

Hong Kong's Cathay Pacific Airways is close to announcing a takeover of smaller China-focused rival Dragonair in a deal reported to be worth USD$1.3 billion, sources familiar with the matter said.

The long-anticipated buyout would give Cathay the profitable routes to the fast-growing mainland China market it has long sought and create a formidable rival for local airlines such as China Southern Airlines and China Eastern Airlines.

"Simple logic is Cathay needs a network into China, Dragonair's got one," said CLSA aviation analyst Kevin O'Connor. "The devil will be in the details."


More...

The 'devil' appears to be involved in a few airline deals going on right now. Interesting if this deal succeeds then Cathay would topple QF as Asia-Pacfic's biggest airline company!

 

[aus_flyer]

"Rival" ??

Since when is an airline that operates completely different routes, and that is partially owned by Cathay anyway, a rival?

 

[gaia]

Would be great to have a One World carrier flying between HKG & PVG, PEK.

 

[JohnK]

"Rival" ??

Since when is an airline that operates completely different routes, and that is partially owned by Cathay anyway, a rival?

It operates the routes that Cathay want into China, and not likely to get unless they buy Dragonair outright, expecially Shanghai.

 

[Yada Yada]

Interesting if this deal succeeds then Cathay would topple QF as Asia-Pacfic's biggest airline company!

You learn something every day. I always thought that SQ was bigger than QF. Not so, at least in terms of revenue. Apologies for the thread drift, but which airline has the bigger fleet?

 

[NM]

Would be great to have a One World carrier flying between HKG & PVG, PEK.

Don't assume the Dragon Air flights will be operated as CX flights. Just because they are owned by CX does not make them CX or OneWorld flights any more than Qantas' ownership of JetStar makes JQ flights OneWorld eligible.

 

[oz_mark]

You learn something every day. I always thought that SQ was bigger than QF. Not so, at least in terms of revenue. Apologies for the thread drift, but which airline has the bigger fleet?

QF (excluding Qantas link/AO/Jetstar) has about 140 aircraft, SQ has about 90 aircraft.

Mind you a large portion of the QF fleet is on domestic duty.

 

[dajop]

any more than Qantas' ownership of JetStar makes JQ flights OneWorld eligible.

Well it does depend on the decision taken by the owner. Whilst JQ flights aren't eligible on xONEx- tickets (I assume) nor on OneWorld redemptions, they are eligible for earning OneWorld status credits when using JetFlex fares.

 

[Yada Yada]

QF (excluding Qantas link/AO/Jetstar) has about 140 aircraft, SQ has about 90 aircraft.

Mind you a large portion of the QF fleet is on domestic duty.

Thanks oz_mark. That is a significant difference.

 

[NM]

Well it does depend on the decision taken by the owner. Whilst JQ flights aren't eligible on xONEx- tickets (I assume) nor on OneWorld redemptions, they are eligible for earning OneWorld status credits when using JetFlex fares.

No, they are eligible for earning Qantas status credits, not OneWorld benefits. There are no benefits or earnings for BA, AA, CX, IB, JA, AY members when flying with JQ. JetStar is not a OneWorld member and so no points/miles/status earning under the OneWorld program. Qants chooses to provide some benefits to its FF members, but that has nothing to do with OneWorld benefits.

 

[dajop]

No, they are eligible for earning Qantas status credits, not OneWorld benefits. There are no benefits or earnings for BA, AA, CX, IB, JA, AY members when flying with JQ. JetStar is not a OneWorld member and so no points/miles/status earning under the OneWorld program. Qants chooses to provide some benefits to its FF members, but that has nothing to do with OneWorld benefits.

Yes true, my mistake - I was thinking entirely through the QF paradigm. What I was trying to say is that OneWorld status can be accrued through the use of Jetstar flights, which contrasts to the total exclusion of Jetstar Asia and (the now defunct) Australian Airlines (& all other non OneWorld partner airlines) from SC earning. I assume CX could do the same for Dragonair for their Asia Miles members - if they chose to.

 

[JohnK]

My guess is that when/if CX acquires Dragonair that some routes will be status earning. One for certain will be the Shanghai route. This is one they have wanted for a long time but have not been able to get.

 

[JohnK]

Cathay Pacific Seals Dragonair Buy-Out

Deal is almost done!

Cathay Pacific Seals Dragonair Buy-Out
June 9, 2006

Hong Kong's Cathay Pacific Airways said on Friday it would pay HKD$8.22 billion (USD$1.06 billion) in cash and shares to take over rival Dragonair in a long-expected deal that expands its access to the fast-growing mainland Chinese market.

Cathay, the world's seventh most valuable airline, has been frustrated by its limited position in mainland China, where its only passenger routes are to Beijing and Xiamen.

Dragonair, which flies to 23 mainland cities including the lucrative Shanghai market, has in turn relied on Cathay to feed it international traffic bound for China.

"It is positive for all parties involved," said Peter Drolet, senior analyst at UOB Kay Hian.


More...

 

[NM]

Amazingly this news was mentioned in the keynote speech at the conference I have been attending this week in USA. It was given as an example of a company looking for new opportunities in what was a closed market.