As Cathay Pacific wields jobs axe, 'swire prince' culture survives

Cathay Pacific Airways hired McKinsey consultants earlier this year to advise on a transformation plan, drawing on turnarounds at regional rivals such as Qantas and Japan Airlines. Battered by competition from Chinese and Middle East airlines and hobbled by missteps in fuel hedging, Cathay in January completed a strategic review, and later announced its biggest job cuts in almost two decades. Following McKinsey's subsequent input - which has not been previously reported - Greg Hughes, Cathay's Chief Operations and Service Delivery Officer, said more than 740 initiatives had so far been identified to cut costs, boost productivity and improve customer service - including easier access to higher 'frequent flyer' status, more economy-class seats on Boeing 777 airliners, and on-demand dining for business-class fliers. Hughes said McKinsey's involvement ended after its consultants helped structure the three-year transformation programme, which is being carried out by Cathay Pacific staff and aims for HK$4b of savings from lowering costs and boosting productivity. "We have always wanted our transformation programme to be something that our people own and can deliver upon," he said. But, as Cathay chases a return to profitability, it looks set to continue a practice that some current and former employees say may be the biggest obstacle to a real change of culture: the airline's unusual executive rotation system. Under this system, so-called "house staff" at unlisted British conglomerate John Swire & Sons Ltd - which owns a majority stake in Hong Kong-listed Swire Pacific, which, in turn, owns 45 percent of Cathay - rotate positions at group companies every few years. Story goes into more details.<br/>