OBITUARY : Roy Farrell

Roy Farrell co-founded one of Asia's most successful airlines, Cathay Pacific Airways, with the Australian Sydney de Kantzow, and was one of the first Westerners to recognise the post-war potential of China as a trading partner.

An American from Texas, he had originally intended to establish a trading company supplying China with badly needed goods at the end of the Second World War. The Roy Farrell Export Company started up in 1945, but had no means of transporting the supplies to China. Farrell therefore bought a US army surplus Douglas Dakota DC-3, called "Betsy", which became the first plane in Cathay's fleet. In 1996 it consists of 57 aircraft.

The tall Texan had long had a fascination with flying but was not able to satisfy it until, aged 28, he managed to scrape together sufficient funds for flying lessons. After graduating as a pilot in 1942 he was desperate to join the China National Aviation Company (CNAC) but lacked the required hours of flying experience. With typical determination he solved the problem by buying a rickety 1929 vintage Laird single-engine plane and put in the hours.

The following year Farrell was on his way to India where CNAC had set up a base to supply the nationalist Chinese forces in Kunming and Chungking who were making a last-ditch stand against the Japanese occupation. The supply route, stretching 1,000 miles, involved extremely hazardous flying over the Himalayas, often rising to altitudes of 18,000ft in non- pressurised and freezing cold aircraft. This was the only way the pilots could avoid the Japanese Zero fighters which inflicted heavy casualties on the men who flew what they called "the Hump".

As he made his 523 trips over the Hump Farrell started thinking of the opportunities which would arise in China after the war. Gavin Young, in his definitive history of Cathay Pacific, Beyond Lion Rock (1988), writes: "He had read about a man years before and never forgotten him: an American businessman with his eyes open who had made a fortune immediately after the Spanish- American War by shipping sugar from Havana to New York. This sort of thing appealed to Farrell." He knew there would be markets in China: "The thing would be to get in early. That's what the fellow in Havana had done."

Very few other businessmen thought this way; they saw China as a hopeless mess, submerged in a civil war with little promise of recovery. But Farrell saw things differently. "I wanted an empire," he told Young. He knew the Chinese were desperate for goods - any goods - decided to found his empire on a consignment of toothbrushes, combs, lipstick and an esoteric assortment of clothing, and then bought the plane to take them to China.

Betsy landed in Shanghai on New Year's Day 1946, after a long flight in which the crew came near to dying. Farrell soon realised that the transport shortage meant that this was where the real opportunities lay rather than in trading. He opened an office in Shanghai and started cargo flights to Australia.

It quickly, albeit chaotically, grew, with second-hand aircraft being pressed into service under a growing team of former CNAC flyers. An office, in fact a single room, was opened in Hong Kong, which then became the headquarters. The trading company was separated from the airline business which acquired the name Cathay Pacific Airways during a drinking session with some foreign correspondents in the Tropicana Bar of the swish Manila Hotel, in the Philippines.

By 1947 a fledgling airline was taking shape, but the British colonial authorities had decided that airlines were a matter of national security and had to be run by British nationals. Farrell tried to maintain control by reducing his ownership stake but was bluntly told that Cathay would be denied landing rights unless he sold out.

Negotiations with the British flag carrier BOAC fell though, giving John Swire & Sons, which controls what is now the Swire Pacific group, the opportunity to diversify its transportation interests out of shipping. It headed a consortium, including the Australian airline, which bought the airline in 1948.

In his unpublished memoirs Farrell recalls seeing Betsy taking off from Manila on the eve of signing the sale agreement. He had tears in his eyes. He was not an enthusiastic seller but made money from the sale. Some of it went into starting unsuccessful airlines in the Philippines and Burma; however, he had more success in Texas oil.

Jock Swire, who paid pounds 175,000 for Swire's share in Cathay, called it a "terrifying" business. However his gamble seems to have paid off. Cathay Pacific now has assets totalling some pounds 3bn.

Stephen Vines

Roy Farrell, pilot and entrepreneur: born Vernon, Texas 1914; twice married (two sons); died Vernon, Texas 3 January 1996.