Release Date:
Release ID: 1009

Cathay Pacific completes shareholding realignment making Dragonair a wholly owned subsidiary

Cathay Pacific Airways today announced that all the necessary approvals and conditions relating to the shareholding realignment involving Cathay Pacific, Air China, China National Aviation Company (CNAC), CITIC Pacific and Swire Pacific have now been completed. With immediate effect, Hong Kong Dragon Airlines (Dragonair) becomes a wholly owned subsidiary of Cathay Pacific.

Press Release

Dragonair will become part of the Cathay Pacific Group but will retain its separate brand, market positioning and identity. Work will begin immediately to maximise the synergies and opportunities that arise from linking Cathay Pacific’s international network with Dragonair’s extensive Mainland services, bringing significant long-term benefits to both carriers and helping to further cement Hong Kong’s position as a leading international aviation hub.

Cathay Pacific Chief Executive Philip Chen said: “This is an important day for both Cathay Pacific and Dragonair that marks the culmination of two years of complex negotiations. It was a result well worth waiting for. We can now welcome Dragonair staff into the greater Cathay Pacific family as we forge ahead as partners in building what has the potential to become a great force in aviation.

“It is significant that this historic development should be happening in our 60th anniversary year. For six decades we have been growing together with Hong Kong and now, with an enlarged Cathay Pacific grouping, we will be ensuring that the growth continues and, indeed, moves to a new level. It is a very proud moment for our airline group and a significant milestone in the development of aviation in Hong Kong. Cathay Pacific and Dragonair are two great airlines, and together they will be much greater.”

The restructuring will result in 174 job losses at Dragonair in Hong Kong among office staff from various departments. In addition, 17 staff in overseas offices will also be affected. In total, this represents about 5 per cent of the total Dragonair workforce. Every effort has been made to keep job losses to a minimum and those affected are being offered a package that is well in excess of legal requirements. A job outplacement service will also be made available to Dragonair staff affected by the changes.

No Cathay Pacific jobs will be affected by the grouping with Dragonair, but the airline will need to make changes in various areas to provide services and support for its sister carrier. A number of Dragonair staff are being transferred to work in new positions at Cathay Pacific resulting from the integration. An additional 46 posts are also being made available as a result of the lifting of a recent recruitment freeze at Cathay Pacific. Dragonair staff who transfer to a comparable job in Cathay Pacific will be employed on comparable terms.

As well as bringing Dragonair into the Cathay Pacific family, the shareholding restructuring will also result in a much closer partnership between Cathay Pacific and Air China, with the two airlines increasing their cross-shareholding and beginning work to increase co-operation in a number of key areas. The linking of Cathay Pacific, Dragonair and Air China will bring significant benefits to the Hong Kong and Beijing hubs and aviation in the region generally.
59 Piccadilly Manchester M1 2AQ
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