Cathay Pacific to buy out DHL’s minority share in Air Hong Kong

Cathay Pacific and DHL entered into a non-binding memorandum of understanding (MOU) that positions Cathay Pacific Group to purchase DHL Group’s 40 percent stake in Air Hong Kong (AHK), making AHK a wholly owned subsidiary of Cathay Pacific, which already owns the other 60 percent.

Under the current non-binding terms, set to take effect on Dec., 31, 2018, DHL would acquire AHK’s eight A300-600 freighters, which would then be leased back to AHK following the transaction. The MOU then stipulates that AHK will operate “an agreed freighter network to destinations in Asia for DHL and will receive agreed service fees and reimbursement of operating expenses.”

As the deal stands, after all the changes are complete, the same planes will be flying the same routes for the same customer. AHK is an express operator with DHL as its main customer, billing itself as, “the only dedicated freighter airline based in Hong Kong.” AHK serves Bangkok, Penang, Singapore, Taipei, Narita, Kansai, Nagoya, Seoul, Shanghai, Beijing and Manila, the carrier said.

News of the acquisition comes in the wake of reports of a tough year at Cathay Pacific. The Hong Kong-based carrier’s cargo division, however, has done markedly better than the overall operation, so Cathay said it will continue to emphasize its cargo side.