Cathay Pacific to buy budget airline Hong Kong Express

Cathay Pacific will buy low-cost Hong Kong Express for $ 4.93 billion Hong Kong dollars ($ 628m).

The purchase will be made in cash and through ongoing loan notes, the company said in a stock archive.

Hong Kong Express, which flies to destinations across Asia, will become a wholly owned subsidiary of Cathay Pacific.

Cathay Pacific has undergone its cost cutting business and returned to profit in 201[ads1]8.

"We intend to continue operating Hong Kong Express as a stand-alone airline using the cheap business model," said a Cathay Pacific spokesman in a statement.

Hong Kong Express captures "a unique market segment," said the spokesman, adding that the deal "represents an attractive and convenient way for the Cathay group to support the long-term development and growth of flight activity".

The transaction is expected to be completed by the end of the year.

Turnaround plan

Cathay Pacific returned to profits last year after two years of losses following the launch of a cost-saving program.

The airline has struggled against competition, especially from low cost Chinese carriers covering Hong Kong, mainland China and Southeast Asia.

Last year, it also suffered data outbreaks in IT systems, threatening personal information of up to 9.4 million passengers.