Rupert Hogg, who has resigned as Cathay Pacific's CEO, has been credited with helping to turn the airline profitable after two years of losses Photo: AFP/File
business

Cathay Pacific CEO suddenly resigns

11 Comments
By Jerome Taylor and Elaine Yu

Cathay Pacific announced the shock resignation on Friday of its CEO Rupert Hogg, compounding a torrid week for the Hong Kong carrier after it was excoriated by Beijing because some staff supported 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 10 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.

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.

But it appears those moves were not enough to save its chief 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 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," Hogg said in a Cathay Statement.

Hogg has been replaced by Augustus Tang, a veteran of the Swire Group conglomerate, Cathay's main shareholder.

Analysts reacted with shock to the announcement given 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 Hogg initiated a three-year cost cutting program 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."

© 2019 AFP

©2019 GPlusMedia Inc.

11 Comments
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So much for the right to express your views! As long as they are not protesting while representing the airline (e.g while in uniform etc) then who cares what they do in their private time.

8 ( +9 / -1 )

Cathay moved into damage limitation mode, firing four members of staff associated with the protests

It would be very hypocritical for progressive posters to take issue with these developments. After all, "freedom of speech isn't freedom from consequences" as they like to say. Only government actions count as censorship, anything else is fair game. Those employees doxxed and fired for exercising their freedom of speech in favor of democracy? Consequences, not censorship!

-3 ( +1 / -4 )

Well if a foreign government threatened the integrity of a private companies management, it means the foreign government feel they are the CEO so cannot do your job. I view this resignation as a protest against interference by Beijing.

5 ( +5 / -0 )

He didn’t just resign. He was fired.

0 ( +2 / -2 )

He'll get a good package.

3 ( +3 / -0 )

Most likely he supported the employees and didnt want to reprimand them, so he departed instead.

3 ( +3 / -0 )

Most likely he supported the employees and didnt want to reprimand them, so he departed instead.

Personal data of 20% of passengers affecting 9.4 million passengers leaked but waited 7 months after discovery to report. There are laws requiring companies to declare data leaks within days.  Personal information including passport numbers, identity card numbers, email addresses and credit card details were accessed during the data leak. Then they closed down for a few days affecting 100% of their passengers.

Hogg’s salary is about $1.17 million dollars a year. He didn’t want to reprimand a few employees who protested and just walked away?

1 ( +2 / -1 )

China is the biggest bully in Asia. Even with the slightest opposition, they will make your business suffer. Unless the businesses say we boycott China, nothing will change.

7 ( +7 / -0 )

When you resign, you forfeit any package since you are breaking the terms of the contract that you signed. You will of course be able to keep those share options until they vest, but other future perks will be gone.

If he was pushed / let go, then a package would be provided.

In this case, his resignation does appear poorly timed with certain events, and comments against the Airline coming from the mainland. You can draw your own conclusion as to the reasons for his resignation. However ti comes at a time that CP is experiencing a slump in sales due to the HK disruptions, so further bad news may be forthcoming.

2 ( +2 / -0 )

Who would like to be bullied as head of a company ?

Also, you can see democracy functioning for a country when there is a separation and consideration between work and personal activities.

CEO was right to leave as surely he did not want to be the bully enforcer, although Cathay can claim they fired him.

0 ( +0 / -0 )

This is abominable!

Pressure is being put upon private companies to interfere in the political beliefs of their staff.

Hong Kong people be strong!

0 ( +0 / -0 )

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