Cathay Pacific is to take over buy low-cost carrier Hong Kong Express for HK$4.93 billion ($628 million).

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

The move comes as Cathay Pacific restructures its business to cut costs. The airline returned to profit last year.

The carrier said: “The transaction represents an attractive and practical way for the Cathay Pacific Group to support the long-term development and growth of its aviation business and to enhance its competitiveness.

“It is intended to continue to operate Hong Kong Express as a stand-alone airline using the low-cost carrier business model.”

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