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Qatar Airways announced on Monday that it has agreed to acquire a 9.61% stake (378,188,000 shares) in Cathay Pacific Airways. The acquisition is worth HK$5.16 billion (about $662 million), and gives Qatar more access to the lucrative Chinese aviation market.

“Qatar Airways is very pleased to complete its financial investment in Cathay Pacific,” said Qatar CEO Akbar Al Baker. “Cathay Pacific is a fellow Oneworld member and is one of the strongest airlines in the world, respected throughout the industry and with massive potential for the future.”

The purchase makes history as the first-ever investment in an East Asian carrier by a Middle Eastern airline. As reported by Bloomberg, the purchase gives Qatar access to the very valuable and concentrated Chinese market. Within a decade, China is expected to become with world’s largest aviation market, a position currently held by the United States. Qatar is now the third-largest shareholder in Hong Kong-based Cathay Pacific, behind Swire and Air China.

Following the announcement of Qatar’s purchase, Cathay’s CEO Rupert Hogg  said that he looks forwards to a “continued constructive relationship” with Qatar. The two are both members of the Oneworld alliance and are known for their premium product offerings, such as Qatar’s new Qsuites business class and Cathay Pacific’s first class. Cathay is also facing financial trouble, after posting a loss of $260 million in the first half of 2017.

Investing in other airlines isn’t new for Qatar. The carrier already holds a 20% investment in International Airlines Group, a 10% investment in LATAM Airlines Group and a 49% investment in Meridiana. Earlier this year, Qatar announced plans to take a major stake in American Airlines, however, those plans were later scrapped because the investment no longer met the objectives of Qatar.

Featured image by Philippe Lopez / Getty Images.

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