Cathay Pacific, Swire Pacific, Air China, CNAC and CITIC Pacific have reached an agreement to change the shareholder structure of Cathay Pacific, Dragonair and Air China.

The new structure will offer significant benefits for airline customers and for Hong Kong and Beijing as gateways to China.

Under the agreement, which is subject to shareholder approvals, Dragonair will be wholly owned by Cathay Pacific. Air China will acquire a 17.5% stake in Cathay Pacific, and Cathay Pacific will double its shareholding in Air China to 20%.

Swire will remain the principal, long-term shareholder in Cathay Pacific. Dragonair will continue to operate under its own brand, but under Cathay Pacific management.

Cathay Pacific and Air China will continue to develop closer cooperation on many fronts, including establishing an air cargo joint venture in Shanghai.

The principals of the five parties involved in the proposed share realignment relating to Air China, Cathay Pacific, CNAC, CITIC Pacific and Swire Pacific met this last week at the Swire Pacific headquarters at Pacific Place Hong Kong to finalise details of the formal agreement relating to the deal.

Those attending were the Chairman of Air China, Li Jiaxiang; the Chairman of the China National Aviation Company Limited, Kong Dong; the Chairman of Swire Pacific Limited, Christopher Pratt; the Chairman of CITIC Pacific Limited, Henry Fan; and the Chief Executive of Cathay Pacific Airways Limited, Philip Chen.