Cathay’s Hogg slaughtered by China, HK protests

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Former Cathay CEO Rupert Hogg was forced out after China threatened the airline's business on and over the mainland.(PHOTO: RISE)
Singapore-Airshow-2020

Cathay’s Hogg slaughtered by China, HK protests

The CEO of Hong Kong’s de facto flag carrier, Cathay Pacific Airways, has resigned his post after the airline was caught up in the pro-democracy protests that have engulfed the special administrative region of China. The company’s chief customer and commercial officer also resigned.

Cathay officials confirmed the resignation of Rupert Hogg as CEO and said Augustus Tang will take over the chief executive post. The airline also said that Ronald Lam has been appointed chief customer and commercial officer, succeeding Paul Loo. Lam will remain CEO of Hong Kong Express, which Cathay recently acquired, until a successor has been appointed.

In announcing the change of leadership, the chairman of Cathay, John Slosar, threw Hogg under the proverbial bus and toed the China line by saying “recent events have called into question Cathay Pacific’s commitment to flight safety and security and put our reputation and brand under pressure. This is regrettable as we have always made safety and security our highest priority. We therefore think it is time to put a new management team in place who can reset confidence and lead the airline to new heights. Cathay Pacific is fully committed to Hong Kong under the principle of ‘One Country Two Systems’ as enshrined in the Basic Law. We are confident that Hong Kong will have a great future.”

Cathay came under fire from mainland Chinese authorities after it was revealed that flight attendants and other crew members were participating in the pro-democracy protests roiling Hong Kong and which shut down operations at the airport for two days this past week. Initially, Cathay’s leadership said it would not take a position on staff members and their participation in the protests, but after mainland China authorities stepped in and threatened the airline’s China business, which makes up about half the company’s revenues, the carrier changed its tune.

The airline fired two pilots over their participation in the protests and demonstrations and was forced to turn over crew rosters to mainland aviation authorities, who had demanded that any crew participating in protests not be on any Cathay or Cathay Dragon flight to the mainland. The airline’s share price is also at a 10-year low and the airline’s business was also threatened by Chinese banks and companies that said they would boycott the airline unless it changed its ways.

Aviation analysts said China is flexing its muscles and called Cathay “only the start”, adding China was sending a message to other corporations that the same thing could happen to them if they support the protest movement that has been in play for the last 11 weeks.

As a way to make amends to China, or kowtow as some analysts have described it, the  chairman of Cathay’s biggest shareholder Swire, Merlin Swire, went to Beijing to meet aviation officials, according to media reports.

Earlier this week Cathay officials said they would not comment on the company’s China dealings, but said it was “obliged to comply with regulations from the nation’s aviation authorities”, adding Cathay would not tolerate “illegal activities”.

The situation for Cathay started heading south when Chinese state-run companies began blacklisting Cathay. China Huarong International Holdings, a unit of the country’s largest bad-debt manager, told workers to choose another airline for business and personal trips and China Resources National Corp was said to have given similar directions to its staff. China Citic Bank International, a Hong Kong-based unit of the nation’s largest state-run conglomerate, sent a message to its workers on Wednesday, saying it was to ensure travel safety, according to media reports.

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