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Cathay Pacific chairman to resign amid turmoil at HK airline

Slosar latest departure after Chinese backlash over staff involvement in protests

Cathay Pacific Chairman John Slosar initially took a hand's off attitude toward staff involvement in the protests that have rocked Hong Kong for many weeks.(Photo by Kenji Kawase)

HONG KONG -- Cathay Pacific Airways announced on Wednesday that Chairman John Slosar will leave the company, the latest in a series of exits since Hong Kong's dominant airline came under Chinese pressure over staff involvement in the anti-government protests that have rocked the city for nearly three months.

Slosar, 63, "confirmed that his resignation is due to his retirement," an airline statement said. He is to be replaced in November by Patrick Healy, who has been running the Coca-Cola bottling operations in the U.S. and China of parent company Swire Pacific.

"Recent weeks have brought some of the most extraordinary and challenging times we have ever experienced," Slosar said in a letter to staff.

Cathay Pacific's shares closed up 7.2% at HK$10.70 on Wednesday, climbing in the afternoon as reports spread that Hong Kong Chief Executive Carrie Lam would meet one of the protesters' main demands. The airline announced Slosar's retirement after the close of trading.

Cathay's shares traded as high as HK$12.26 in mid-July. Its troubles started soon after when its flight attendants' union joined a protest against Lam's government at Hong Kong International Airport on July 26 and a pilot was arrested for alleged rioting over his participation in a city demonstration a few days later.

Slosar initially appeared to take a hand's off stance. "We certainly wouldn't dream of telling them (staff) what they have to think about something," he said at a news conference on Aug. 7. "They are all adults. They are all service professionals. We respect them greatly."

Following an outcry in Chinese media articles and social media postings, the Civil Aviation Administration of China ordered the airline to begin submitting detailed crew information for all flights through Chinese airspace and to keep staff involved in Hong Kong's protests off of such flights to address "potential serious risks to aviation safety."

A series of state-owned companies reportedly instituted bans on staff trips on Cathay or its Cathay Dragon unit even though the group is the leading player on many routes between the mainland and Hong Kong.

In the following days, Rupert Hogg resigned as the airline's chief executive along with his most senior lieutenant and the airline fired at least five flight attendants, ground crew and pilots, including the one who had been arrested. Both Cathay and Swire issued public statements offering their "resolute support" to the Hong Kong government and condemning "all illegal activities and violent behavior."

Repeated reminders were issued to staff against showing support for the protests. Most recently, cabin crew from two flights on which emergency oxygen supplies were apparently tampered with were reportedly put on suspension while the matter is investigated.

Cathay, like other tourism-dependent business in Hong Kong, has suffered from the wider downturn in visitation to Hong Kong amid the protests, particularly after demonstrators virtually shut down the airport for two days in mid-August.

Ronald Lam, the carrier's new chief customer and commercial officer, said on Aug. 21 that the airline was experiencing a "significant impact" on its August revenue.

"Traffic into Hong Kong, both business and leisure, has weakened substantially," he said. "We have also now seen ex-Hong Kong traffic starting to soften."

Air China, the country's state-owned flag carrier, is Cathay's second-largest shareholder after Swire and holds four of 17 seats on its board. Qatar Airways holds a stake of about 10% in Cathay.

Cathay said Slosar would leave its board when his chairmanship ends. Previously both chief executive of Cathay and the first non-British chairman of Swire Pacific, U.S.-native Slosar is a naturalized Chinese national.

In his farewell note to staff, Slosar stressed his successor's own Chinese ties, including "many years (spent) in mainland China." Among them were four years as chief executive of Swire's aircraft maintenance operations in Xiamen. "Try out his Putonghua (Mandarin) if you dare but prepare to be surprised," Slosar wrote.

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