Cathay to repay Hong Kong for parts of bailout

Troubled Hong Kong airline Cathay Pacific said Tuesday (June 9) it expects to repay the city's government for part of its bailout over 3 to 5 years.

The over 2 billion U.S. dollars in shares are part of a broader bailout package from Hong Kong.

The local government threw the airline a lifeline on Tuesday to help it weather the global health crisis.

Under the rescue plan, the government will provide a short-term bridging loan and get two observer seats at Cathay's board meetings.

Chief Financial Officer Martin Murray said the package will slash the airline's ratio of debt to equity by half.

Under the plan the Hong Kong government also gains a a 6% stake in Cathay.

However, Hong Kong Finance Secretary Paul Chan said on Tuesday it was not the government's intention to remain a long-term shareholder in the airline.

According to the International Air Transport Association, airlines around the globe are set to lose a record $84 billion this year with little demand for air travel.