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.

Cadet Instructors
 

Mr Slosar, during your first Pilot Auditorim you fielded some pointed questions regarding Cadet Instructors. This issue has yet to be resolved. Some years ago the incumbent DFO wrote to the pilot body highlighting the difficulties FTA was having in both recruiting and retaining Instructors and how this shortage was having a very negative impact upon the supply of Cadets to CX. To solve this problem, the incumbent DFO said that in return for a period of time served as an Instructor at Adelaide, the Cadet Instructors would receive ex-pats terms for the remainder of their CX careers. Given that the majority of the Cadet Instructors are/were in their early 20's, the dollar cost of this solution represented a very significant sum, perhaps in the order of $HK1bn over the career of these young pilots.

Questions.

1. Putting aside all the various legal issues and focussing on the Cadet Instructors as a business decision, do you think the problem of the shortage of Instructors at FTA could have been solved by other, more cost effective means, perhaps a modest increase in the fees paid to FTA to enable them to recruit and retain Instructors?

2. Given the large sums of money involved, does it concern you that such a large number of the Cadet Instructors are sons of Senior Cathay Training Captains?


Fluff Answers:

1. I am sure the DFO of the day looked at the problem and took a course of action he believed to be the best. I do not have all the facts in front of me and do not propose to "Monday Morning Quarter-back" his decision.

2. No it does not concern me as well under half of the Cadet Instructors are sons of Cathay Pilots.

BF,

Agreed...what a disgrace...but since they are paying I might have to stop by for a beer "on the house"...

That beer is cheap access to your ears and mind.

Is RH the ex ops director at bmi?