United Airline
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Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 1:22 am

The rumour about Swire taking over Air China Group and CX, CA, KA be merged into one airline has been denied.

However, there are rumours about Swire/Cathay Pacific planning to take a majority stake in Dragonair. Can anyone confirm that?

Will Dragonair's name be kept under this deal? I suppose so....
 
gigneil
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 1:23 am

Doesn't Swire already own a major stake in KA?

N
 
commavia
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 1:30 am

Quoting Gigneil (Reply 1):
Doesn't Swire already own a major stake in KA?

No. CNAC owns 43.29%, CITIC owns 28.5%, Cathay Pacific owns 17.79% and Swire owns 7.71% (the remaining 2.71% held by other interests).

IMO, a Cathay-Dragonair merger under the Cathay name is long overdue and would position Cathay as not only the strongest carrier with reach into China, but also position HKG as one of the premier hubs of the world, even more so than it already is. CX and KA should merge!
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 1:37 am

Swire will continue to be the majority shareholder of Cathay Pacific.

Yes there are talks about CX/Swire taking a majority stake if not 100% stake in Dragonair. But wouldn't it be better if we keep the name KA? Better to have two airlines in Hong Kong rather than just one.

SIA owns 100% share in Silkair but both airlines operate separately under separate names.
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 1:40 am

Quoting Commavia (Reply 2):
IMO, a Cathay-Dragonair merger under the Cathay name is long overdue and would position Cathay as not only the strongest carrier with reach into China, but also position HKG as one of the premier hubs of the world, even more so than it already is. CX and KA should merge!

If this happens CX will have some narrowbodies... Not sure if this is cool.

BTW Dragonair is profitable. Are CNAC and CITIC willing to sell a profitable airline? Why should they?
 
cslusarc
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 1:47 am

Shouldn't CX try to buy China Eastern, a partner of AA?
--cslusarc from YWG
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 1:52 am

Quoting Cslusarc (Reply 5):
Shouldn't CX try to buy China Eastern, a partner of AA?

Better off buying Dragonair. Dragonair is a Hong Kong based airline. China Eastern is not and thus the chinese government might not say yes.

Wonder if KA's name/international network will continue to exist.... I hope so.....
 
jakob77
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 2:03 am

CX purchased a 10% stake in Air China last December.
CA is allied with Star partners such as LH and UA but with CX having a stake in CA now, CA eventually going into Star is not so much of a sure thing now.

The CX / KA / CA ownership is quite complicated.
Swire has 46% of CX and also owns 7% of KA.
CX has nearly 18% of KA and 10% of CA.
CITIC owns 28.5% of KA and also owns 20+% of CX.
CNAC owns CA and 43% of KA.

It's all very complicated.
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 2:28 am

Wonder if KA's brand name will cease to exist. I hope not! It is a good name.

Quoting Jakob77 (Reply 7):
CX purchased a 10% stake in Air China last December.
CA is allied with Star partners such as LH and UA but with CX having a stake in CA now, CA eventually going into Star is not so much of a sure thing now.

It is a minority share only. It might not affect CA eventually going to Star.

Quoting Jakob77 (Reply 7):
The CX / KA / CA ownership is quite complicated.
Swire has 46% of CX and also owns 7% of KA.
CX has nearly 18% of KA and 10% of CA.
CITIC owns 28.5% of KA and also owns 20+% of CX.
CNAC owns CA and 43% of KA.

It's all very complicated.

Indeed.

BTW Swire used to have 50%+ Shares in CX right? Why did they sell part of them?

And I remember HSBC used to hold 10% of CX
 
lutfi
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 11:05 am

They didn't (sell shares in CX)

In 1996/7 there was a rights issue to pay for the move to CLK. CITIC decided to take all the new shares, so diluted the Swire holding down to 42-43% or so. Since then, Swire have been slowly buying shares, and are now up to 46%
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 11:20 am

Will they increase it back to 50%+ again? And should they?

[Edited 2005-06-10 04:26:40]
 
lutfi
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 2:53 pm

If the share price falls again...

Much like Li Ka Shing buys more shares in CK and Hutch when he thinks the shares are undervalued, Swire buys shares in CX and HAECO when they look cheap
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 3:09 pm

Quoting Lutfi (Reply 11):
If the share price falls again...

Much like Li Ka Shing buys more shares in CK and Hutch when he thinks the shares are undervalued, Swire buys shares in CX and HAECO when they look cheap

Oh cool. BTW CX owns HACTL too right? Or Swire....

CNAC used to own 5.01% share in CX . Also CTS. Why did they sell them? Guess they sold them to Swire and CITIC right?

And one more thing would CNAC/CITIC be willing to sell KA to CX? Why should they? What do they get? KA is profitable. No reason why they should sell KA.

If CX takes over KA I wonder if they will change KA's name......Hope not. Anyway in any event CX will get more rights to China if they take over KA right?
 
jakob77
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 3:55 pm

CNAC and CITIC would be willing to sell if they get a stake in the new combined entity of CX / KA.

CX would just inherit all of KA's routes if they merge.
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 3:58 pm

Quoting Jakob77 (Reply 13):
CNAC and CITIC would be willing to sell if they get a stake in the new combined entity of CX / KA.

CX would just inherit all of KA's routes if they merge.

But they won't get much will they since Swire is committed to be the majority share of CX in the long run. Doubt Swire will sell any of CX's shares.

I am sure they will not change CX's name. But what about KA?

Is this merger likely?

[Edited 2005-06-10 09:08:40]
 
jakob77
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 4:57 pm

The merger is really a question of when.
The merger is about combining the best of both worlds of what CX and KA have to offer. You don't have to be a genious to see that. CX's international network (and lack of presence in the PRC) put together with KA's extensive PRC route network is the perfect match. Currently, CX is way behind of the likes of other carriers in the region such as SQ, NH, JL, and MH in terms of coverage of the PRC but with KA, it'll put CX at the forefront. KA will benefit as well as mainland Chinese become more affulent and travel abroard. Currently, CA / CZ / MU's international networks are still vastly inferior to CX's. CX / KA combined can offer convenient one-stop connection service via HKG to various international destinations not serviced by any of the PRC carriers.

I doubt Swire would be willing to let go of its majority control over CX since CX is the crown jewel amongst all of Swire's properties unless Swire maintains its majority control in the new CX / KA entity or if it gets a lot of financial incentives.
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 5:06 pm

The merger is indeed beneficial to China, Hong Kong, CX and KA, especially CX and Hong Kong as they can combine CX's extensive international network with KA's large network in China.

CX is pretty slow in getting rights to China I must say.

But Swire is unlikely to sell any of CX's shares and will remain as CX's principal shareholder, will CNAC and CITIC be willing to sell KA to CX? What do they get? I doubt they will get much shares in the new combined entity.

Will they change KA to CX 100%??? I mean will KA's name cease to exist?

Looking forward to CX's B 747 Advanced order. Hopefully it will be a large order.
 
jakob77
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 5:27 pm

Quoting United Airline (Reply 16):
But Swire is unlikely to sell any of CX's shares and will remain as CX's principal shareholder, will CNAC and CITIC be willing to sell KA to CX? What do they get? I doubt they will get much shares in the new combined entity.

Will they change KA to CX 100%??? I mean will KA's name cease to exist?

I doubt anyone could give you a correct answer to your various questions about the future of KA because simply nobody knows. It's all purely speculation at this time. Even at the management level at CX, KA, and CA, it's still under discussion so I doubt they know either. There's no final verdict yet on the outcome. You can only use your common sense to speculte on what is the most likely outcome to satisfy all parties involved.
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Fri Jun 10, 2005 5:40 pm

CX gets the right to fly to China automatically once they takeover KA 100% I suppose, regardless of whether or not they change the name.

CX taking over KA is likely I think. Not sure if CITIC/CNAC is willing to sell their majority share in KA for a minority share in the combined CX/KA. Doubt they will get much for the combined CX/KA. Also KA is profitable.

Thanks anyway.

Quoting Jakob77 (Reply 15):
You don't have to be a genious to see that. CX's international network (and lack of presence in the PRC) put together with KA's extensive PRC route network is the perfect match. Currently, CX is way behind of the likes of other carriers in the region such as SQ, NH, JL, and MH in terms of coverage of the PRC but with KA, it'll put CX at the forefront. KA will benefit as well as mainland Chinese become more affulent and travel abroard. Currently, CA / CZ / MU's international networks are still vastly inferior to CX's. CX / KA combined can offer convenient one-stop connection service via HKG to various international destinations not serviced by any of the PRC carriers.

Correct.

Quoting Jakob77 (Reply 15):
I doubt Swire would be willing to let go of its majority control over CX since CX is the crown jewel amongst all of Swire's properties unless Swire maintains its majority control in the new CX / KA entity or if it gets a lot of financial incentives.

They will not. Go to: http://www.cathaypacific.com/intl/ab.../press/0,3845,31342-116968,00.html

Regards.
 
United Airline
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RE: Swire/CX To Take A Majority Stake In KA?

Sat Jun 11, 2005 1:30 am

Just to add something.....

If I remember correctly, CA plans to build a mini-hub in Hong Kong for some of its international flights right? In my opinion this will not affect CX or other airlines much and it will enhance Hong Kong's hub as a premier hub.

If this is true I can see that this will be included as part of the takeover deal.

See how things go. It will be interesting I am sure.

[Edited 2005-06-10 18:33:13]

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