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UPDATE 2-Cathay Pacific reshuffles top leadership after annual loss
April 12, 2017 / 10:10 AM / 7 months ago

UPDATE 2-Cathay Pacific reshuffles top leadership after annual loss

* COO Rupert Hogg to take over as CEO

* Current CEO Ivan Chu moves to parent firm

* Changes come as airline seeks to cut management costs (Adds analyst comment)

SHANGHAI, April 12 (Reuters) - Cathay Pacific Airways on Wednesday said Ivan Chu will step down as chief executive officer on May 1, and will be replaced by the airline’s current Chief Operating Officer (COO) Rupert Hogg amid a wider reshuffle of the airline’s leadership.

The announcement comes after Hong Kong’s flag carrier posted its first annual loss since 2008 last month and unveiled plans to cut the cost of middle and senior management roles at its Hong Kong head office by 30 percent.

Hogg, 55, who was appointed COO in 2014, will also become chairman of the airline’s short-haul arm, Cathay Dragon. His COO position will be eliminated, the statement said.

Chu, who was made CEO in 2014, will become chairman of John Swire & Sons (China) Limited, the British-based privately-owned parent of Cathay’s largest shareholder Swire Pacific, where he will oversee Swire’s mainland China investment and development strategy. He will remain a non-executive director of Cathay Pacific, the statement added.

“(Chu) led the team in devising the three-year transformation strategy which will provide the platform for Cathay’s medium term recovery and continued development,” said Cathay Pacific’s chairman John Slosar in a press release.

“The new senior management structure we have announced today is the fruit of that extensive work and we are confident that it can take Cathay Pacific to new heights.”

Will Horton, Hong Kong-based senior analyst at CAPA Centre for Aviation, said the replacement of Chu by Hogg had been expected ahead of the airline’s deterioration in performance but these were faster and broader changes than expected.

“It reflects the urgency to make deep changes and have the right people in place as soon as possible,” he said.

The other leadership changes it made included appointing Paul Loo, currently director of corporate development and IT, as chief customer and commercial officer of Cathay Pacific from June 1.

Gregory Hughes will join Cathay Pacific as chief operations and service delivery officer from the airline’s sister firm, Hong Kong Aircraft Engineering Co Ltd, it said.

Horton said these changes to the senior management structure also indicated that the company could be taking a different tack to succession planning.

“Before, once a COO was appointed it was a near guarantee that person would be CEO. Now there will be a few individuals right below the CEO and the board can see how they deliver in their positions,” he said.

Shares in Cathay Pacific, which have dropped 14 percent in the past one year, closed down 0.55 percent on Wednesday versus a 0.93 percent rise in the Hang Seng index. (Reporting by Brenda Goh; Additional reporting by Jamie Freed; Editing by Himani Sarkar)

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