Cathay Shares Drop After Third Executive Resigns

 - September 5, 2019, 11:10 AM

Shares of Hong Kong's dominant airline, Cathay Pacific, tumbled nearly four percent in early trade on Thursday morning after the shock resignation of yet another executive announced on Wednesday.

According to a company statement, Chairman John Slosar will be “retiring” after Cathay’s next board meeting on November 6, prompting media to speculate reasons behind his swift departure. According to regulatory filings, Slosar’s latest three-year term was due to expire in May 2020. Slosar, who joined the airline’s parent company, Swire Pacific in 1980, became chairman of Cathay Pacific in 2014. He also served as Cathay Pacific’s chief operating officer in 2007 and CEO in 2011.

Slosar is to be succeeded by long-term Swire executive Patrick Healy, who currently serves as managing director of the group’s beverage division, Swire Coca Cola Ltd, as well as the director of John Swire & Sons Ltd and non-executive director of Swire Properties Ltd. Previously, he spent four years as CEO of HAECO Xiamen, a maintenance, repair and overhaul (MRO) provider located in Southeast China.

Slosar’s surprise exit follows the recent resignation of CEO Rupert Hogg and chief customer and commercial officer Paul Loo, which came amid a politically-charged week that saw the shutdown of Hong Kong International Airport and the sacking of four Cathay Pacific employees over their involvement in anti-government protests. Hogg has since been replaced by Augustus Tang, the head of Hong Kong Aircraft Engineering Company (wholly owned by Swire Pacific); Loo was replaced by Ronald Lam, CEO of Cathay’s low-cost carrier Hong Kong Express. Lam’s successor is long-serving Cathay executive Mandy Ng.

Shares of Cathay Pacific rose sharply on Wednesday following the televised announcement that a controversial government extradition bill, which triggered three months of city-wide protests, would be formally withdrawn. Despite this, pro-democracy protestors are vowing to continue the rallies until the government meets four additional demands.

Cathay warned its employees not to participate in the demonstrations or face the prospect of firing following pressure from Beijing. The airline must now comply with a new set of regulations imposed by the Civil Aviation Administration of China (CAAC), which include submitting crew manifests and suspending staff who support the protests. China’s aviation regulator also said it could prevent airplanes from landing if airlines do not comply with the directives.