Air Transport World

Cathay's conservative challenge.(Cathay Pacific Airways Ltd.)

Walking the business tightrope during the handover transition was tough enough before the downturn put some slack in the rope

Politics and international aviation go hand in hand, and never more so than in Hong Kong, where the politically explosive British hand-over of the colony to mainland China has dogged Cathay Pacific for the last decade.

As managing director of Cathay and then chairman of it and Hong Kong parent John Swire & Sons (HK) Ltd. beginning in 1992, Peter Sutch has presided during this delicate period. At the end of this month, at age 54, he departs to become executive director and a board member of U.K. parent John Swire & Sons Ltd., a company long known for its conservative operating style.

Although British, Sutch has called Asia home for his entire adult life. He leaves with obvious sadness. He also leaves feeling his job is unfinished. Cathay lost money in 1998 for the first time in 22 years. It faces not only a changing commercial world but also a world where local politics could produce even more minefields in the future than in the past.

Those minefields aren't the result of corporate inexperience. Swire expanded to China in 1861 but like many others left for Hong Kong in 1949. Despite the relocation, 90% of Swire's revenue today still comes from China, Hong Kong and Taiwan. While once again expanding in China, like other British "hongs" (trading houses), analysts say Swire must tread gently when competing against Chinese firms. …

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