image

Cathay Pacific

Hong Kong’s Cathay Pacific sends in high-flying manager Alex McGowan with hopes of reviving talks with restive pilots

Man currently overseeing business restructure at loss-making carrier has been tipped as future boss

PUBLISHED : Wednesday, 18 July, 2018, 2:00pm
UPDATED : Wednesday, 18 July, 2018, 10:50pm

Cathay Pacific Airways has parachuted one of its star performers – a man barely halfway through leading its company restructure – into a new role tackling an issue central to the loss-making airline’s return to profitability: disgruntled pilots.

Strategic transformation head Alex McGowan is the new general manager for aircrew, sources said. McGowan had lately been in charge of turning around Hong Kong’s flagship carrier, including overseeing 600 job cuts earlier last year.

His main task will be to give the airline’s talks with pilots another shot. They stalled last November over disagreements on pay, benefits and changes to flying schedules.

To shave HK$4 billion (US$510 million) from its books by next year, Cathay Pacific has been pushing for savings on aircrew costs of up to HK$1 billion.

Insiders say McGowan is well liked by staff and is credited with getting the job done and delivering on big projects. In his transformation role, he reported directly to CEO Rupert Hogg.

He has been in the industry for more than two decades and held a string of roles in commercial and marketing divisions, previously working for British Airways.

One source from Cathay Pacific tipped him to be the airline’s future boss.

“He knows how to run a business,” the source said.

But McGowan’s move is seen in some quarters as unusual, because the airline is barely halfway through a three-year restructuring programme, to which he is integral.

Hong Kong airport to boost security fee for every departing passenger

Geoffrey Cheng Bik-hoi, deputy head of research at investment bank BOCOM International, said: “The restructuring is a key project for Cathay. It is a CEO initiative, so a change of the guy in charge in the middle of that always seems to be a bit unusual.

I’m only a few days into my new role so it’s early days and I’m looking forward to working with our fantastic pilots and their representatives
Alex McGowan

“But,” he added, “managing pilots needs to be a thing they tend to.

“The guy has been given a task to manage a key asset of the company, particularly as Cathay Pacific has a strained relationship with aircrew, [especially] with pilots on compensation.”

A Cathay Pacific spokeswoman said in an email that it was “a long-standing practice for members in our management team to be assigned to a variety of roles across the organisation”.

The airline was referring to its managers, particularly those who joined the management trainee programme run by its biggest shareholder Swire Pacific, who rotate between different commercial and operational jobs every couple of years.

Cathay Pacific chief Rupert Hogg recently said the restructuring programme was “on track”, but that there was “a lot more to do”. The airline has been losing money since 2016, though it recorded a smaller-than-expected loss of HK$1.25 billion in 2017.

Corrine Png, CEO of transport research firm Crucial Perspective, said: “Trimming pilot-related costs is the remaining hot potato, and Alex’s transfer to this division signals Cathay’s focus on achieving this by year end as they head towards the final year of their transformation programme.”

High-flyer McGowan is credited with being a key driving force in leading the design and delivery of a new lie-flat business class seat, installed throughout Cathay Pacific’s long-haul aircraft fleet, which bagged the airline a string of global awards.

McGowan said in an email to the Post: “I’m only a few days into my new role so it’s early days and I’m looking forward to working with our fantastic pilots and their representatives.”

20 flights in 11 days: How to be a frequent flier with British Airways

Negotiations between pilots and the loss-making carrier have been going on for almost four years.

A particular bone of contention has been pilots’ fierce resistance to the carrier’s attempts to drastically cut their housing allowances.

Union sources said they were hopeful that the new leadership in the department would yield more positive pilot talks. Changes included Chris Kempis, who replaced Anna Thompson as the airline’s director in charge of all aspects of flight operations.