Cathay Pacific Airways' stock plummeted 5% during intraday trading on Friday. The sharp decline followed news that its largest shareholder, Swire Pacific, sold a significant portion of its stake in the airline at a discount.

Swire Pacific announced it would sell 153.1 million Cathay Pacific shares, representing approximately 2.52% of the airline's total issued shares, at HK$11.74 per share. This placing price represented a 9.6% discount to Cathay Pacific's last traded price of HK$12.99 on Thursday. Following the completion of the sale, Swire's ownership in Cathay Pacific will reduce to about 45.12%.

Additionally, Cathay Pacific faces operational headwinds as the Middle East conflict disrupts air freight routes. The airline's CEO noted that many of its freighter flights to Europe normally stop in Dubai to refuel and pick up cargo, but due to the situation, they are now flying direct from Hong Kong to Europe with payload restrictions. This comes amid soaring air freight rates and jet fuel prices that have doubled since the start of the conflict.