Swire Pacific Chairman says no plans for staff cutbacks at Cathay Pacific
Swire Pacific Chairman John Slosar said the group’s aviation unit, Cathay Pacific Airways, has no plans to layoff staff even as the global airline industry face challenges.
“There is no plan at all. None and zero [staff will be laid off],” Slosar said after the group launched a commemorative book in Beijing to celebrate Swire group’s 200th anniversary this year and the 150th anniversary of the opening of its first office in China.
Slosar noted that the global slowdown had affected Cathay in the form of weaker bookings for first and business class seats, while cargo continued to be weak.
“For Cathay Pacific, it is not a huge decline, but we are not seeing the growth that we are use to seeing. We will just keep our focus on controlling costs and hang in there until the market improves,” Slosar said.
In response to questions whether the airline will cut staff if the economy deteriorates further, he said such measures were never implemented during Sars in 2003 or the global financial crisis in 2008. “We need people when business comes back,” he said, adding that the whole aviation business including CX group and HAECO employs around 50,000 people worldwide.
Early this month, a round of layoffs at the Bank of East Asia stirred up concerns about worsening employment prospects in the city.
On June 2 the bank said it would trim back the size of its brokerage operations in the city, cutting 180 jobs, or 3.8 per cent of its workforce.
Hong Kong-listed Swire Pacific’s business consist of five core areas: property, aviation, beverages, marine services and trading and industrial. It is the largest shareholder of Cathay Pacific Airways and its sister airline Dragonair, now branded as Cathay Dragon. It owns the Pacific Place mall and property development in Admiralty and is the developer of the Opus Hong Kong luxury apartment building in Mid-Levels.
Slosar said the group’s shopping malls need to adapt to changes in the market amid softening retail sales and dwindling footfall from mainland tourists.
“If there are not many mainland visitors to buy our things we have to attract local people,” he said.
Swire’s The Mall in Pacific Place and Citygate Outlets in Tung Chung saw retail sales decline up to the double-digit range in the first quarter this year.
He said the group’s business in mainland cities have yet to see any major signs of a downturn in operating conditions.
“We have exposure in different cities in China. Our aviation business in China is doing good at the moment. Retail sales at our shopping malls is a little bit slower than last year but no big problem,” he said.
He said Swire’s relationship with the mainland administration hasn’t been affected by its relatively not-so-aggressive investment in the nation, saying the group has more than 70 billion yuan (HK$82.8 billion) worth of assets in the mainland and employs over 30,000 people.
“They [Chinese officials] understand that good investments take time,” he said.
The group’s massive retail-office-hotel project, HKRI Taikoo Hui, in Shanghai will open in phases later this year.
Its aviation business will focus on expansion in China to meet growing demand for cold storage in the wake of growing awareness of food safety.
Clement Lam, director of Swire Pacific Cold Storage said the group has set aside 2.7 billion yuan to build cold storage facilities across the nation.
“Each cold storage facility cost about 300 to 400 million yuan. Our budget is enough to build eight,” he said.
The group operates cold storage facilities in Guangzhou, Shanghai, Langfang , Ningbo, and Nanjing. Discussion are underway for a facility in Wuhan.
Commenting on Hong Kong, Slosar said the company remains upbeat on the outlook.
“Swire investment will still focus in Hong Kong,” he said.
This story was amended to correct a reference by Slosar as to the relationship between Swire and the mainland administration in paragraph 14.
