HONG KONG (BLOOMBERG) - Cathay Pacific Airways named Rupert Hogg as its chief executive officer, replacing Ivan Chu, as Asia's biggest international airline struggles to revive earnings after reporting its first annual loss in eight years.
Mr Hogg, 55, chief operating officer since March 2014 and a 30-year veteran at parent Swire Group, will take over May 1, Cathay said in a statement to the stock exchange Wednesday. Mr Chu will become chairman of John Swire & Sons (China) , according to the statement.
The change at the top, which usually occurs every three years at the carrier, comes in the midst of the biggest business revamp Cathay has embarked on in two decades to help reverse the decline in performance. The premium carrier has been under pressure from low-cost rivals in the region and Chinese airlines that are offering direct routes, even as demand for business travel dips.
While sharing sketchy details of its review in January, Cathay said changes "will start at the top" and it would eliminate some positions as part of the reorganization, with key changes taking effect by mid-year. The airline has set a target of 30 per cent savings in employee costs at its Hong Kong head office, it said last month.
Mr Chu was appointed CEO on March 14, 2014, taking over from John Slosar, the current chairman of Swire Group. The carrier's three most recent CEOs - Mr Chu, Mr Slosar and Tony Tyler - were all operating chiefs before assuming the top post, with each holding the job for about three years.
"Succession plan is well orchestrated," said Will Horton, a Hong Kong-based analyst at CAPA Centre for Aviation. "By the time someone is COO, there's effective support from the board for that person to be the next CEO. Rupert is pragmatic that it's beyond time for Cathay to move on and seek a stronger future."
Shares of Cathay dropped about 30 per cent since Mr Chu became CEO, compared with a 12 per cent gain in the benchmark Hang Seng Index in the same period. The carrier last month reported a net loss of HK$575 million (S$104 million) for 2016.
Asia's largest international airline has announced a three-year "corporate transformation" plan to reduce costs by as much as 3 percent, while seeking to increase passenger capacity by as much as 5 per cent a year through measures including nonstop flights to new markets.
Mr Hogg joined Swire Group in 1986 and became a director and COO of Cathay when Mr Chu took over as CEO. He was previously director for cargo and sales and marketing at the airlines. Cathay Pacific Group employed more than 33,700 people worldwide, including about 23,400 for the main airline, according to the interim report for the half year ended June 2016.