Cathay Pacific completes acquisition of Dragonair.
Hong Kong's Cathay Pacific Airways announced Thursday it has completed its acquisition of Dragon Airlines, which will retain its separate brand, market positioning and identity even while being part of the Cathay Pacific Group.
Cathay Pacific Chief Executive Philip Chen called the HK$8.2 billion ($1.05 billion) acquisition a ''significant milestone in the development of aviation in Hong Kong.''
''This is an important day for both Cathay Pacific and Dragonair that marks the culmination of two years of complex negotiations,'' Chen said in a press statement. ''Cathay Pacific and Dragonair are two great airlines, and together they will be much greater.''
Cathay Pacific and Dragonair are the two major air carriers of Hong Kong.
Cathay focuses on international routes while Dragonair has a much bigger share of China's aviation market, flying to 23 Chinese destinations from Hong Kong. Cathay only flies to Beijing and Xiamen in southern China, though it will start flying to Shanghai in December.
Dragonair Chief Executive Officer Kenny Tang told a press conference that the restructuring will result in the loss of 174 mostly office jobs at Dragonair in Hong Kong, while 17 staff in the carrier's overseas offices will also go. In total, this represents about 5 percent of the carrier's total workforce.
''It is both difficult and painful to be eliminating positions, but great care has been taken to minimize job losses,'' Tang said. ''However...we are offering a separation package well in excess of legal requirements.''
The shareholding realignment under which Dragonair has become a wholly owned subsidiary of Cathay Pacific entails cross shareholdings between Cathay Pacific and Air China, China's flag carrier.
Cathay Pacific said the realignment will result in a closer partnership between it and Air China, with the two airlines beginning work to increase cooperation in a number of key areas.
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|Publication:||Asian Economic News|
|Date:||Oct 2, 2006|
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