September 4, 2019 / 8:51 AM / 3 months ago

Cathay Chairman Slosar resigns weeks after CEO left, deepening reshuffle

SINGAPORE (Reuters) - Hong Kong’s Cathay Pacific Airways (0293.HK) shook up its top ranks further as Chairman John Slosar resigned on Wednesday, less than three weeks after mounting Chinese regulatory scrutiny led to the shock departure of its chief executive.

The airline has become the biggest corporate casualty of anti-government protests after China demanded it suspend staff involved in, or who support, demonstrations that have plunged the former British colony into a political crisis.

Slosar, 63, will be replaced by Patrick Healy, a long-time executive at the airline’s top shareholder and manager Swire Pacific Ltd (0019.HK), Cathay announced.

“I think the timing is definitely very surprising,” BOCOM analyst Luya You said of Slosar’s resignation. “It is a very inconvenient time for Cathay.”

Cathay shares rose 7.2% on Wednesday as media reports that an extradition bill that triggered months of unrest will be withdrawn drove up the market.

Hong Kong leader Carrie Lam later announced the withdrawal of the bill.

In a filing to the stock exchange, Cathay said Slosar, who has been chairman since 2014, “confirmed that his resignation is due to his retirement and that he is not aware of any disagreement with the Board of the Company.”

Slosar’s latest three-year board term had been due to expire in May 2020 unless extended by a shareholder vote, according to regulatory filings, although a spokeswoman said his retirement had been planned “for some time”.

His resignation follows the departure of CEO Rupert Hogg last month. Hogg was replaced by Augustus Tang, who had previously headed Swire’s aircraft maintenance company.

The exit of Slosar, a former Cathay CEO who has spent 39 years with Swire, and the appointment of Healy will take effect after Cathay’s Nov. 6 board meeting.

Cathay said last month forward bookings had declined sharply as a result of the unrest.

When asked about staff participating in protests, Slosar said last month the airline “wouldn’t dream” of telling staff “what to think about something”.

Two days later, China’s aviation regulator said crew who engaged in the protests posed a threat to safety and should be suspended from staffing flights to the mainland and over its airspace.

Pilots and cabin crew at the airline have since described a “white terror” of political denunciations, sackings and phone searches by Chinese aviation officials.

In a memo to staff after his resignation and which was seen by Reuters, Slosar said recent weeks had brought some of the most “extraordinary and challenging times we have ever experienced”.

He said that for an airline, however, volatility is normal and Cathay had emerged stronger in the past when it faced challenging times.

FILE PHOTO: Cathay Pacific Group Chairman John Slosar attends a news conference on the carrier's annual results in Hong Kong, China March 14, 2018. REUTERS/Bobby Yip/File Photo

Healy, 53, joined Swire in 1988 and spent 18 years working in mainland China, including four as the head of Swire’s Xiamen aircraft maintenance facility where he worked closely with Cathay’s new CEO Tang.

Healy said in a statement that he was confident in the future of Hong Kong despite the current challenges.

“Cathay Pacific will remain fully committed to this great city as Asia’s key aviation hub,” he said.

Reporting by Jamie Freed; Editing by Muralikumar Anantharaman

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