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Cathay Pacific’s Chairman Resigns as China Pressures Hong Kong Business Cathay Pacific’s Chairman Resigns as China Pressures Hong Kong Business
(about 4 hours later)
HONG KONG — The chairman of Cathay Pacific Airways resigned on Wednesday, the second top executive of the embattled Hong Kong carrier to step down as protests have roiled the city. HONG KONG — The chairman of Cathay Pacific Airways said on Wednesday that he would resign, making him the second top executive of the embattled Hong Kong carrier to step down since protests began roiling the city.
In a filing Wednesday afternoon with Hong Kong’s stock exchange, the airline said that John Slosar will resign as chairman and as an executive director in November. He will be replaced by Patrick Healy, a 53-year-old longtime executive at John Swire & Sons (H.K.) Limited, the holding company that controls the airline. In a filing Wednesday afternoon with Hong Kong’s stock exchange, the airline said that the executive, John Slosar, would resign as chairman and as an executive director in November. He will be replaced by Patrick Healy, 53, a longtime executive at John Swire & Sons (H.K.) Limited, the holding company that controls the airline.
Mr. Slosar’s resignation “is due to his retirement,” the company said in its filing. The resignation of Mr. Slosar, 63, follows the departure last month of Rupert Hogg as the airline’s chief executive. Cathay characterized the planned resignation of Mr. Slosar, 63, as a retirement. The announcement came less than three weeks after the departure of Rupert Hogg as the airline’s chief executive.
In an internal memo to employees viewed by The New York Times, Mr. Slosar described the recent weeks as the “most extraordinary and challenging times” the airline had experienced. Mr. Slosar could not be reached for comment. In an internal memo to employees viewed by The New York Times, Mr. Slosar described the recent weeks as the “most extraordinary and challenging times” the airline had experienced.
“I can well appreciate that such volatility can cause concern over what the future may hold,” he wrote, but added that the airline had always been subject to business and geopolitical pressures.“I can well appreciate that such volatility can cause concern over what the future may hold,” he wrote, but added that the airline had always been subject to business and geopolitical pressures.
“Each time we have faced challenging times, we have emerged stronger than ever before,” the memo said, “And I do believe this will be the case once again, so have confidence.” “Each time we have faced challenging times, we have emerged stronger than ever before,” the memo read. “And I do believe this will be the case once again, so have confidence.”
The Chinese government has put increasing pressure on Cathay Pacific, which is perhaps Hong Kong’s most well-known business internationally but draws a significant amount of revenue from the mainland. Last month, Chinese regulators demanded that Cathay workers who participated in the demonstrations be barred from flying to mainland China. Air China, a state-controlled mainland carrier, also owns a minority stake in the airline. Mr. Slosar’s announcement comes at one of the most difficult times in the company’s history, stemming from the demonstrations that have shaken Hong Kong since June. More broadly, it comes as Beijing seeks to bring Hong Kong’s business community to its side, with intense criticism of companies by state media and the suggestion that they could lose access to China’s dynamic economy if they do not fall in line.
More broadly, China has put pressure on businesses in Hong Kong to side with Beijing against the protests, which have become increasingly violent since they began in June. Chinese state-run media has urged major global accounting firms to fire employees who participate in demonstrations. It has also put pressure on property developers and consumer product companies to fall in line, striking fear into companies that depend on the mainland economy for their profits. Cathay Pacific is particularly vulnerable to pressure from the mainland. Chinese destinations account for a significant amount of its revenue. It also counts Air China, a state-run airline, as a minority shareholder.
The demonstrations began in opposition to a proposed law that would allow Hong Kong, which has its own judicial system, to extradite people accused of crimes to mainland China, where the courts are controlled by the Communist Party. The protests have since broadened to include demands for universal suffrage and an independent inquiry into police conduct in handling the protests. The demonstrations began in opposition to a proposed law that would allow Hong Kong, which has its own judicial system, to extradite people accused of crimes to mainland China, where the courts are controlled by the Communist Party. Clashes between demonstrators and the police have grown increasingly violent has the protests have dragged on.
Underscoring Cathay’s situation, its shares jumped more than 5 percent on Wednesday before Mr. Slosar’s resignation was announced, following news reports that Hong Kong’s leaders would formally withdraw the extradition bill. Cathay has come under intense scrutiny by Chinese officials, who want to bring the protests to a halt. One of its pilots was arrested during a demonstration, and the airline began an investigation after the flight information for a Hong Kong police soccer team was leaked.
Previously, Mr. Slosar had said the political views of employees were not the airline’s business. “We certainly wouldn’t dream of telling them what they have to think about something,” he said at a news conference. “They’re all adults. They’re all service professionals. We respect them greatly.”
In response, Chinese regulators last month demanded that Cathay workers who participated in the demonstrations be barred from flying to mainland China. It has also demanded lists of employees who fly to China or through its airspace.
Cathay since forbade its employees from engaging in protests that Hong Kong authorities consider illegal. Unions have accused the airline’s management of being too tough with its workers, including with its firing of the chairwoman of a flight attendants’ union after she shared pro-demonstration material on her Facebook account.
Cathay has declined to comment on individual employees but said “it takes into account all relevant factors” when dismissing employees and stays within the limits of both the law and employment contracts.
It is not clear how long the scrutiny will last. On Wednesday, Carrie Lam, Hong Kong’s top leader, said she would withdraw the extradition bill. Cathay’s shares jumped by more than 5 percent on Wednesday after media reports that the withdrawal was coming.
But the protests have since broadened to include demands for universal suffrage and an independent inquiry into police conduct, and opposition lawmakers and others involved with the protests said Ms. Lam would have to meet their other demands to stop the unrest.
That unrest is beginning to take a toll on Cathay’s traffic. The company has said it expects a hit to its revenue in August and later.
Mr. Slosar, who has worked for Swire and its related companies for 39 years, has been a top executive at Cathay Pacific for more than a decade. He became its chief executive in 2011, then its chairman in 2014. The airline prospered initially under his leadership as Asia’s economic growth took off, but the airline has been pressured in recent years by the rise of budget carriers.Mr. Slosar, who has worked for Swire and its related companies for 39 years, has been a top executive at Cathay Pacific for more than a decade. He became its chief executive in 2011, then its chairman in 2014. The airline prospered initially under his leadership as Asia’s economic growth took off, but the airline has been pressured in recent years by the rise of budget carriers.
Mr. Healy, the new chairman, has worked at Swire for 31 years and is currently managing director of Swire Coca-Cola, its beverage distribution arm.Mr. Healy, the new chairman, has worked at Swire for 31 years and is currently managing director of Swire Coca-Cola, its beverage distribution arm.