British Airways Share Increase with Interest of Cathy Pacific Talk

The shares of British Airways, which have been more than cut in half during the year, closed with an increase of 4.3% to 148.2 pence yesterday with talks on the market that Cathay Pacific could be planning to takeover the airline. British Airways, however, said that they wouldn’t comment on the speculation and rumor.

The regulations of the European Union prevent investors who are not part of the European Union from buying over 49.9% of an airline that is part of the union. However, Cathay Pacific, which is based in Hong Kong, is 40% owned by Swire Pacific, a British controlled company.

An analyst said that a bid for British Airways from Cathay Pacific would make sense, because British Airways has a major network throughout Asia that could be replaced with the network of Cathay Pacific. He also added that both of the carriers focus on business class passengers and are also part of the One-World Global Airline Alliance, which includes Iberia as well, a Spanish airline who is currently in merger discussions with British Airways.

Swire Pacific is owned by John Swire & Sons, which originated in Liverpool almost 200 years ago and now has a London headquarters, with a 36.5% stake. The private company is involved with a broad range of interests in business and reported a £299 million profit related to shareholders last year with a turnover of almost £3 billion, according to the website of the firm. Swire Pacific was not immediately available for a comment on the speculated takeover.

Find out more about British Airways at: www.britishairways.com