Asia-Pacific

Cathay Pacific's CEO resigns following Hong Kong protests

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The shock resignation follows a campaign to boycott the airline after a number of its employees expressed support for the Hong Kong protests.

Cathay Pacific has announced the shock resignation of its CEO Rupert Hogg following a torrid week for the Hong Kong carrier after it was excoriated by Beijing because some staff supported the pro-democracy protests.

The 72-year-old airline has been left reeling after it became ensnared in the hardening of rhetoric from the communist mainland over weeks of anti-government protests that have plunged Hong Kong into crisis.

Over the last two weeks, the airline emerged as a target on the mainland after some of its 27,000-strong workforce took part in, or voiced support for, the protests.

Cathay Pacific CEO Rupert Hogg has resigned.
Cathay Pacific CEO Rupert Hogg has resigned.
EPA

During a general strike earlier in the month, some staff joined in, including the union representing Cathay Pacific's flight attendants.

China's reaction was swift. State media began writing a series of condemnations of Cathay, accusing it of not doing enough to rein it its workers.

Then the country's aviation regulator demanded that the airline prevent such staff from working on flights to the mainland or those routed through Chinese airspace.

Cathay moved into damage limitation mode, firing four members of staff associated with the protests - including two pilots - agreeing to comply with the new regulations and releasing a series of statements supporting Hong Kong's embattled government.

Protesters occupy the arrival hall of the Hong Kong International Airport during a demonstration on August 12, 2019.
Protesters occupy the arrival hall of the Hong Kong International Airport during a demonstration.
Getty Images AsiaPac

But it appears those moves were not enough to save it's chief Mr Hogg, who has been credited with helping to turn the airline profitable after two years of losses.

In a statement posted on the Hong Kong stock exchange on Friday, Cathay said Mr Hogg had resigned "to take responsibility as a leader of the Company in view of recent events".

"The Board of Directors believes that it is the right time for new leadership to take Cathay Pacific forward," Cathay said in a statement. 

Another senior Cathay executive, Chief Customer and Commercial Officer Paul Loo, also announced his departure.

"These have been challenging weeks for the airline and it is right that Paul and I take responsibility as leaders of the company," Mr Hogg said in a Cathay Statement. 

Mr Hogg has been replaced by Augustus Tang, a veteran of the Swire Group conglomerate, Cathay's main shareholder.

'Sending a message'

Analysts reacted with shock to the announcement given that Mr Hogg had been well respected and successful during his time in the top spot.

"He's a really good and effective CEO so it's kind of disappointing to see that," said one aviation analyst, who commented on the condition of anonymity because of the political sensitivities of speaking openly.

Until recently Cathay had been celebrating a turnaround in its fortunes after Mr Hogg initiated a three-year cost-cutting programme that had begun to pay dividends.

Earlier this month it announced a first-half profit of $172.23 million, higher than expectations and a reversal of losses from the year before.

But the perception by Beijing that it was either supportive of protests - or not doing enough to condemn protesters - was enough to earn it a black mark.

Fired up by the thunderous state media articles, China's heavily censored social media platforms lit up with indignation from people vowing never to fly Cathay again.

On China's Twitter-like Weibo platform, the hashtag #boycottcathaypacificairline has racked up tens of millions of views.

The airline was also forced to cancel some 272 flights on Monday and Tuesday when Hong Kong's airport became filled with protesters, some of whom physically stopped travellers from boarding.

Shukor Yusof, founder of aviation consultancy Endau Analytics in Malaysia, said Cathay's censure was a warning to other companies that Beijing will not tolerate dissent.

"Cathay is only the start," he told Bloomberg News. "China is sending a message to other corporations in Hong Kong that the same thing can happen to them."

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