Cathay Pacific and offshore marine business will test incoming Swire chairman
Analysts say the task has been cut out for Merlin Bingham Swire, who takes over as chairman of the group’s Asian holding unit and property subsidiary on July 1
Turning around the fortunes of Swire Pacific’s aviation and offshore marine services divisions will be the two biggest challenges facing incoming chairman Merlin Bingham Swire, according to analysts.
Merlin Swire, 44, chief executive of John Swire & Sons, is a sixth-generation descendant of its 19th-century founder, and takes over as chairman of Swire Pacific, Swire Properties and Hong Kong Aircraft Engineering on July 1.
Jonathan Galligan, head of Asia gaming and conglomerates at CLSA, singled out Cathay Pacific Airways, in which Swire Group owns a 45 per cent stake, and Swire Pacific Offshore (SPO) as two underperforming units that will require a lot of time and effort to turn around.
“Cathay Pacific continues to face structural challenges as competitive pressures increase, which the group will need to continue to address.”
Cathay Pacific reported its worst half-year results in at least two decades, a loss of HK$2.05 billion (US$262 million), almost double the estimated HK$1.2 billion forecast by analysts. The company blamed the result for the six months ended June 2017 on fierce competition and higher jet fuel costs, including losses from fuel hedging.