Cathay’s chairman resigns weeks after CEO steps down

Bloomberg

Cathay Pacific Airways Ltd Chairman John Slosar followed the chief executive officer in resigning after the carrier faced scrutiny from China for its employees’ involvement in the anti-Beijing protests in Hong Kong.
Slosar, 63, will be replaced by Patrick Healy, a 31-year veteran at parent Swire Group, Cathay said on Wednesday in a filing. The changes are scheduled to take effect after a November 6 board meeting.
Swire is cleaning house atop its most high-profile asset to avoid falling further afoul of Beijing. The airline, whose business would be crippled if it lost access to China, has become a symbol of the danger companies face in Hong Kong as they seek to steer clear of angering the mainland government.
Chinese authorities last month threatened to ban Cathay flights from flying into mainland airspace and imposed a swathe of demands on Hong Kong’s
flag carrier after its employees participated in months-long demonstrations. The company swung quickly into action, with group Chairman Merlin Swire flying into Beijing to meet with Chinese authorities. Then Rupert Hogg abruptly stepped down as Cathay’s CEO to take responsibility for the airline’s troubles. At least seven other employees have also left the carrier amid the turmoil.
Cathay employees took part in a general strike last month that caused a shutdown of Hong Kong’s airport, canceling hundreds of flights from the carrier’s hub. Meanwhile, some Chinese state-owned firms boycotted the airline, raising further concerns that the demonstrations in the city could undermine the company’s efforts to turn around its business.
Cathay and Swire have since cracked down on employees, warning workers multiple times not to participate in or support any illegal protests.
Though it’s unclear how big the financial toll will be, the airline has warned that it expects “significant impact” on its revenue from August and beyond as the protests weigh on travel demand. Both business and leisure travel into Hong Kong has “weakened substantially” and traffic from the city has started to soften, especially on short-haul routes to China and South Korea, Cathay has said.

Swire Veterans
Slosar, also a Swire veteran, ran Cathay as CEO from 2011 before becoming its chairman in 2014. As CEO, he faced challenges like intensifying competition, rising fuel costs and union demands — yet succeeded in keeping profitability and maintaining revenue growth.
Healy, 53, has worked his way up at Swire’s various businesses in Hong Kong, China and Germany, and is currently heading Swire’s Coca-Cola operations. He graduated from St John’s College, Cambridge University, in July 1988 with a Bachelor’s degree in modern languages.
Healy and the new CEO, Augustus Tang, now have a delicate task of continuing to placate China, an increasingly important market for the seven-decade-old airline. The new leaders also need to minimise the fallout from staff, customers and investors as the unrest in its home base continues to simmer.
After Hogg’s departure, the Global Times, a newspaper published by China’s Communist Party, said the resignation may not be enough to atone for Cathay’s “lukewarm attitude” to dealing with its “radical” staff.