Cathay Pacific

1946–1960: The early years

Cathay Pacific Airways was founded on 24 September 1946 in Hong Kong. Sydney "Syd" de Kantzow, Roy Farrell, Neil Buchanan, Donald Brittan Evans and Robert "Bob" Stanley Russell were the initial shareholders. Buchanan and Russell had already worked for de Kantzow and Farrell at Roy Farrell Import-Export Company, the predecessor of Cathay Pacific, that was initially headquartered in Shanghai. Both de Kantzow and Farrell were Ex-Air Force pilots who had flown The Hump, a route over the Himalayan mountains. Farrell purchased the airline's first aircraft, a Douglas DC-3, nicknamed Betsy, at Bush Field, New York City in 1945. The company began freight services on 28 January 1950 from Sydney to Shanghai, after Farrell and Russell flew the plane to Australia and obtained a licence to carry freight (but not passengers) earlier that month. Its first commercial flight was a shipment of Australian goods. The profitable business soon attracted attention from Republic of China government officials. After several instances where the company's planes were detained by authorities in Shanghai, on 11 May 1946, the company relocated, flying its two planes to Hong Kong. Farrell and de Kantzow re-registered their business in Hong Kong on 24 September 1946 as Cathay Pacific Airways Limited, while another sister company, The Roy Farrell Export Import Company (Hong Kong) Limited, was incorporated on 28 August 1946 and chartered some flights from Cathay. (According to International Directory of Company Histories, two companies were formed for tax purposes.)

They named the airline Cathay, the ancient name given to China, and Pacific because Farrell speculated that they would one day fly across the Pacific (which happened in the 1970s), and, moreover, to avoid the name "Air Cathay" as it had already been used in a comic. The Chinese name for the company ("國泰") was not settled on until the 1950s. It comes from a Chinese idiom meaning "Peace and Prosperity" and was at the time often used by other businesses called "Cathay" in English.

According to legend, the airline's unique name was conceived by Farrell and some foreign correspondents at the bar of the Manila Hotel, while another narrative was the name was taken in the Cathay Hotel in Shanghai Bund, during drinking and brainstorming, and choosing Cathay was to avoid the word China in the airline name. On Cathay Pacific's maiden voyage, de Kantzow and Peter Hoskins flew from Sydney to Hong Kong via Manila. The airline initially flew routes between Hong Kong, Sydney, Manila, Singapore, Shanghai, Saigon, and Bangkok, with additional chartered destinations. The airline grew quickly. By 1947, it had added another five DC-3s and two Vickers Catalina seaplanes to its fleet.

In 1948, a new legal person of Cathay Pacific Airways was incorporated, with John Swire & Sons (now known as Swire Group), China Navigation Company, Australian National Airways being the new shareholders of the new entity, acquiring the assets from the old legal person; the old legal person, was renamed into Cathay Pacific Holdings, as well as retaining 10% shares of the new Cathay Pacific Airways. de Kantzow, Farrell and Russell were the shareholders of Cathay Pacific Holdings at that time. It was reported that the colonial British government of Hong Kong required the airline was majority-owned by the British. Despite de Kantzow being a British subject through his Australian roots, Farrell was an American, thus forcing them to sell their majority stake. Under Swire's management, de Kantzow remained in the airline until 1951, while Farrell had sold his minority stake in Cathay Pacific soon after Swire's takeover in 1948, due to his wife's health problems. He returned to Texas and became a successful businessman.

Swire later acquired 52% of Cathay Pacific Airways. As of 31 December 2017, the airline is still owned by Swire Group to the extent of 45% through its subsidiary Swire Pacific Limited, as the largest shareholder. However, Swire Group also formed a shareholders' agreement with the second largest shareholder, Air China (which was controlled by state-owned China National Aviation Holding), which Cathay Pacific and Air China had a cross ownership.

In the late 1940s, the Hong Kong Government divided the local aviation market between Cathay Pacific and its only local competitor, the Jardine Matheson-owned Hong Kong Airways: Cathay Pacific was allocated routes to the south (including South-East Asia and Australia), while Hong Kong Airways was allocated routes to the north (including mainland China, Korea, and Japan). The situation changed with the establishment of the People's Republic of China and the Korean War, which reduced the viability of the northern routes. In 1959, Cathay Pacific acquired Hong Kong Airways, and became the dominant airline in Hong Kong.

Under Swire, another significant sister company, HAECO, was established in 1950.