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."


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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!

[odoherty]

"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.