Exclusive | Cathay Pacific Group: Hong Kong’s Cathay Dragon set for new CEO but flights may be limited to China, sources say
- With speculation rife over Dragon’s future, sources say it will keep going for the foreseeable with senior recruits pending
- But it is envisaged the region-serving carrier may be downscaled to only running flights in China
Cathay Dragon is set to keep flying for the foreseeable future with a new chief executive officer being lined up, sources say, as part of a wider reshuffle of senior management.
And the Post understands Cathay Pacific will bring back a top-tier director role for cargo, the airline’s most valuable income stream amid the collapse in air travel, with personnel announcements expected as early as next week.
Cathay acts swiftly to protect mainland business after threat from Beijing
The moves mark the first major reshuffle of executives under Cathay Pacific Group’s new leadership of CEO Augustus Tang Kin-wing and chairman Patrick Healy, who took the helm as part of an overhaul of senior management amid the anti-government protests.
The CEO role at Cathay Dragon, however, would be downgraded from director level, giving it less prominence, sources said.
The Dragon brand has been subject to heightened speculation after its parent company Cathay Pacific Group launched a structural change review in response to the long-term impact facing airlines after the coronavirus pandemic. The review could include a reduction of headcount, planes, brands and routes.
However, Reuters earlier reported that a merger of the two main Cathay brands, Pacific and Dragon, faced obstacles from the mainland regulator Civil Aviation Administration of China over the issue of consolidating traffic rights under the Pacific brand, making it potentially beneficial for the group to limit Dragon services to China only.
Cathay Pacific and Dragon suffered an unaudited loss of HK$4.5 billion in the first four months of 2020 as Covid-19 took its toll.
Currently, Dragon’s main role is to fly within the region and carry transit passengers to and from Cathay Pacific’s predominantly long-haul flights.
The changes would pave the way for its non-China routes to be divided up between Cathay Pacific and HK Express.
Cathay Dragon, the city’s second-largest airline, has a fleet of 48 aircraft and flies to 48 cities across Asia. Dragon and HK Express will share equally an order for 32 Airbus A321neo single-aisle jets which will start to be delivered later this year.
The key to Cathay Dragon’s attractiveness is its access to mainland China, operating 21 routes which amount to hundreds of flights per week in good times, whereas Pacific only flies to Beijing and Shanghai.
At 62, Algernon Yau Wing-wah, the CEO of Cathay Dragon since 2015, is due to retire imminently, although it is understood he is to remain with the company on a consultancy basis.
Mainland China to remain off-limits for Hong Kong transit passengers
Yau is also the service delivery director at Cathay Pacific, overseeing areas including the airline’s product offering and standards, and also oversees the business operations of the group’s subsidiaries.
The departure of one of the airline’s most experienced local executives in aviation and on mainland China affairs is a loss to the company and ends a 38-year career.
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Hong Kong flagship airline Cathay Pacific hit with financial trouble amid coronavirus outbreak
“Cathay Pacific has had more sudden management changes in the past few years than previous periods. This has been due to the difficulties faced in the operating environment both internally and external forces,” said David Yu, finance professor at New York University Shanghai.
“The current management realignments will shape its operating strategies going forward, along with the importance management places on regional markets such as China and its subsidiaries such as Cathay Dragon and HK Express.”
The airline’s CEO Rupert Hogg and his deputy Paul Loo Kar-pui were ousted from their jobs while the regulator took measures such as imposing more inspections on staff and planes on the mainland.
