Cathay Pacific’s CEO Rupert Hogg, and the airline’s Chief Commercial Officer, have resigned. Hogg has been well-regarded in the role, driving a turnaround in the airline’s finances.
Hogg attributes his resignation to “challenging weeks for the airline” while mainland China has pressed the airline to fire employees sympathetic to protesters and has placed restrictions on the airline’s flights to, from and through the mainland — as well as encouraged boycotts by mainland companies.
Meanwhile the airline’s Chairman says “recent events have called into question Cathay Pacific’s commitment to flight safety and security and put our reputation and brand under pressure.” It is only China that has called into question the airline’s commitment to safety (by employing people the Chinese government considers ‘terrorists’). No airline Chairman, on his own, suggests there is any question of their commitment to safety.
Now, the new CEO of the airline is currently CEO of HAECO, the maintenance and engineering division of the company which does excellent work. The new Chief Commercial Officer also comes from inside the company, moving over from being CEO of newly-acquired HK Express.
Cathay Pacific stock has hit a low amidst the boycotts and airport closures, but that’s not even mentioned as a reason. This isn’t to appease markets. After all, the company is substantially owned by very few shareholders. Swire Group owns 45% of the airline, while state-controlled Air China owns 30%. China’s aviation authority announced that they met with Merlin Swire.
Ultimately the move is harmful to China’s ability to maintain Hong Kong as a business center, showing how the state will meddle in corporate affairs rather than adhering to “one country two systems.” And intervention in this manner won’t help to quell the protesters who are pushing back against mainland intervention.