More Questions
Mr Slosar, you have been employed by Swire since 1980. Swire is a major Shareholder of Cathay. Over the past 32 years you have risen up the ranks of Swire and now find yourself CEO of The Cathay Pacific Group. No doubt, you will continue to rise up the Swire leadership ladder, which may or may include senior Leadership roles in Cathay.
Question: When you are making a strategic business decision, which group of shareholders do you consider foremost, Swire or Cathay?
Fluff Answer: I do what is best for the Cathay Paciifc Group, as this is also what is best for the Shareholders, whether that is Swire, Air China or the very many "Mom and Pa" investors from HK
Follow-up question. You recently published interim results which recorded Group losses of just under $HK 1bn. You primarily cited rising fuel costs. However, examination of the Interim Results show Total Fuel Expenditure rose in line with Turnover and Staff Costs at around 9%. However, the standout rise was Aircraft Maintanence Costs which rose 24%. Numerically, that rise was just under $HK 1Bn, being essentially the interim loss. HAECO, in which your employer Swire, is the major shareholder and holds exclusive Management Responsibilities, received the bulk of that increased expenditure. Resultant of the loss, no interim dividend was paid and the payment of 13th month to HK must now be in doubt. Have any of the non-Swire shareholders or HK Staff expressed disquiet as to the abnormally large charge for Aircraft Maintainence?
Fluff Answer: Firstly, it is far to early to be discussing the payment of 13th month. Traditionally we see a rise in profitability in the second half year, although I do not wish to raise hopes because as your question rightly states, Fuel Prices are remaining stubbornly high. As for the rise in Aircraft Maintainance charges, that was fully and previously explained as being due to increase in maintainance and some additional costs on the aging 744 Freighters.
Further follow-up Question. Examination of the recent Swire Pacific Interim report shows the Cathay Pacific's Loss attributable to the Swire Shareholders was HK$421m, which was nearly offset by the HAECO profit of $HK361m. It must be very heartening that Swires can record a near neutral result for their Aviation Interests in such challenging conditions? It must also be heartening that Swires were able to declare an Interim Dividend?
Fluff Answer: I am not CEO for Swires so cannot comment. However, Swires are a multi- national company diversified beyond Aviation and it is therefore unsurprising they gave a Dividend on an occasion that Cathay did not.
Last edited by Liam Gallagher; 28th Aug 2012 at 09:59.