CX suspends trading

[F_one]

CX requested the HK stock exchange this morning to halt all trading due to possible "price sensitive" transactions. What are they up to now?

[Michael Hunt]

Looks like Citic may be reassessing it's stake in Cathay. Rumour of course!

[cpdude]

Looks like Air China will own 1/3rd of CX.:ooh:

[Cider30]

Aug. 17 (Bloomberg) -- Air China Ltd., the world’s biggest carrier by market value, is set to increase its stake in Cathay Pacific Airways Ltd. by buying shares from Citic Pacific Ltd., according to three people familiar with the situation.
The transaction may be announced as early as tonight, according to one of the people, who declined to be identified before a public announcement.
All three companies suspended their shares from trading in Hong Kong today, pending price sensitive announcements. Air China and Citic Pacific both hold 17.5 percent stakes (http://www.bloomberg.com/apps/quote?ticker=293%3AHK) in Cathay Pacific, according to data compiled by Bloomberg.

[Freehills]

I, for one, welcome our new Communist overlords!

[geh065]

Swire will also be buying a bit so not all 17.5% will go to Air China although the majority will be.

[gliderboy]

Better watch out CX Pilots...

Remember it will be an ACQUISITION not a MERGER with Air China Pilots.

Therefore watch out....they are coming for Seniority and Perks!!

Gliderboy:ok::ok::8

[Loiter1]

The day I fly using Air China procedures and standards is the day they fit ejection seats to CX aircraft.:eek:

[AGNES]

I had come across an Air China pilot with expert voice. The way he talked really sounded like a Cathay pilot. Interesting!

[gliderboy]

What is hilarious is the fact that the guys who left Dragonair to fly for Air China (based out of Sydney) would have the last laugh.

They would be the most senior out of all this!!!!:)

Gliderboy

[gliderboy]

And for the record...

Air China uses total Airbus procedures not joint Boeing/Airbus dodgy FCOM's like CX/KA.

Gliderboy

[AGNES]

Gliderboy,

No wonder. The flight was from Sydney!

[bogie30]

Is that a paper merger?

[hongkongfooey]

No, that would be a mark to market negative equity partial full merger aquisition takeover hedged at 300 dracmas per managed fund bull market.
Or to translate from CX speak " would you like Vaseline with that pineapple ? "

[airplaneridesrfun]

just a good way to strategically change the business structure and prevent any other player from extracting cash from CX.

[oicur12]

"The day I fly using Air China procedures and standards is the day they fit ejection seats to CX aircraft"

Really. Based upon your knowledge of . . . . . . ?

[Loiter1]

Really. Based upon your knowledge of . . . . . . ?

Based upon the guys I know flying for Air China.

...and by the way they aren't laughing.

[And Then]

CX Airbus SOPs are clumsy. The manuals are cut and pasted from Airbus documentation. What is frightening is all the background information left out.

At KA it gives one man, the loaned CX chief pilot, an inordinate amount of power in determining operational procedures without account.

It is my understanding CX do not do command training or checking on Beijing sectors because their SOPs are dysfunctional. One example of a most absurd and unprofessional syndrome. Yet KA has to apply these procedures in everyday China operations whilst CX is pragmatically aware of their limitations in such!

I've flown Air China wet leases. Was always an easy day out for me. Just bring your own food. I'd welcome Air China SOPs over CX..

[ALPHA FLOOR]

And Then you sound like a lover scorned....

AFL

[Loiter1]

I guess I should be more specific. The problems with Air China are not their SOPs, it is a lack of adherence to them. This is second hand, I do not work for Air China and never have, but I do have it on pretty good account that the standard of adherence to the procedures is quite diverse. The other problem at Air China (and this is certainly not peculiar to them and the same could be said about CX) is the single pilot fast jet mentality that persists with the ex-mil pilots, who also tend to be in the left hand seat. Sure, the SOPs are fine, and so they should be as they are generic, but whether or not people actually follow them (and understand them) is another matter.

[ByAirMail]

And TAnd Then you sound like a lover scorned....

AFL

What make you say that? I flew for various airlines before CX and must agree that CX have the most "home made" procedures and S.O.P. Unfortunately CX procedures are the worst of all the S.O.P’s I’ve used. Most of the changes the last 5 years were reverting back to original Boeing / Airbus procedures. Mr. Boeing and Airbus send millions certifying their aircraft (no to mention on lawyers). Unfortunately there are some BIG ego's in CX that know better then Mr. Airbus and Boeing. My concern is what the insurance and lawyers will do when we (god forbid) lose a hull.

Do you have any previous airline experience before CX Alpha Floor?, and if so how did your procedures vary from the manufacturers?

[ByAirMail]

P.S. I know two brothers who left K.A. for Air China, both are fine gentleman and very professional aviators… definitely K.A’s loss and Air China’s gain.

[Kitsune]

Air China raises Cathay Pacific stake

By Tom Mitchell in Hong Kong

Published: August 17 2009 19:55 | Last updated: August 17 2009 19:55

Air China, the country’s flag carrier, has agreed to pay HK$6.3bn (US$813m) to increase its stake in Cathay Pacific, only three years after first securing a holding in the Hong Kong airline.

The transaction with Citic Pacific, the Hong Kong arm of China’s largest investment group, will boost Air China’s stake in Cathay Pacific from 17.5 per cent to 29.99 per cent – just below the takeover threshold.

Swire Pacific, Cathay’s controlling shareholder, also agreed to pay HK$1bn for an additional 2 per cent of the airline, bringing its shareholding to 42 per cent.

In Hong Kong, controlling shareholders may not increase their stake by more than 2 per cent a year without triggering a general offer.

Swire, controlled by John Swire & Sons of the UK, is an enduring symbol of Hong Kong’s colonial past and has a long history of complex interactions with Chinese government flagships.

Citic Pacific first invested in Cathay in 1987. More recently, in 2006, Swire and Cathay entered into a wide-ranging cross-shareholding agreement with Air China.

Under the terms of that agreement, China’s flag carrier cannot make a takeover bid for Cathay – or accept a third-party bid – without approval from the Hong Kong airline’s board. Cathay, in turn, has a 20 per cent stake in Air China.

Christopher Pratt, chairman of both Swire and Cathay, said on Monday: “It remains the firm intention of Swire Pacific to remain the single largest shareholder in [Cathay], as indeed we have been for the past 60 years.

“As we have made plain many times in the past, Swire Pacific is wholeheartedly committed to the long-term development of the aviation industry in Hong Kong and the mainland.”

Air China, the world’s largest airline by market capitalisation, said in a statement that the increased shareholding “will serve as a platform for further co-operation” with Cathay and “be useful in terms of boosting [our] international competitive strengths and brand value”.

Both Air China and Swire paid Citic Pacific HK$12.88 a share, representing an 11 per cent premium to Cathay’s last closing price.

Citic Pacific lost $1.9bn last year on poorly designed foreign exchange hedging contracts. The conglomerate also revealed in April that it was the subject of a Hong Kong police investigation into alleged false statements and fraud.

Copyright The Financial Times Limited 2009.