Cathay Pacific kowtows to Beijing

Airline executives resign and two pilots are fired for taking part in roiling Hong Kong protests

Cathay Pacific A350 B-LRN(Flickr photo)

Cathay Pacific A350 B-LRN(Flickr photo)

TAIPEI (Taiwan News) – Cathay Pacific announced major personnel changes on Friday (Aug. 17), with Hong Kong scholars saying this was due to pressure from China, Ming Pao reports.

China Central Television News (CCTV-13), a Chinese government-owned media company, reported on its website at 4:50 p.m. that Cathay Pacific Chief Executive Rupert Hogg and customer and commercial officer Paul Loo (盧家培) resigned. However, it was not until 5:14 p.m. that Cathay Pacific and the Hong Kong Stock Exchange (HKEX) issued an official statement about the personnel changes.

Hogg said in the statement that he and Loo would “take responsibility as leaders of the company” and the resignation would take effect Monday (Aug. 19). Hogg and Loo will be replaced by, respectively, Augustus Tang (鄧健榮) and Ronald Lam (林紹波). Hogg and Loo are not expected to have positions at holding company Swire Group after their resignations.

Cathay Pacific Chairman John Slosar said it was time to put “a new management team in place that can reset confidence.” The statement also clarified that Cathay Pacific strongly supports the “one country, two systems” principle and remains optimistic about Hong Kong’s future.

In recent weeks the company saw itself embroiled in the controversy over the ongoing anti-extradition bill protests in Hong Kong. One of its pilots was arrested for “rioting” by police during the 728 Central and Sheung Wan March.

The Global Times, another Chinese government-owned media company, said on Aug. 7 that Cathay Pacific ground staff leaked flight information about Hong Kong police officers boarding a plane. A second pilot was accused on Aug. 12 of “improper use of company information” for posting a photo of the aircraft cockpit on the internet, calling for Hongkongers to take part in airport protests.

Cathay Pacific received a “major safety warning” from the Civil Aviation Administration of China (CAAC), banning employees who supported or participated in the protests from flying in Chinese airspace. It also ordered the company to provide detailed crew lists.

Later, Cathay Pacific sent an internal email to all employees stating “zero tolerance” for “illegal activities,” including participating in protest marches. It also confirmed the sacking of two ground staff employees who leaked information, plus the two pilots.

Andy Kwan (關焯照), a former associate professor at the Chinese University of Hong Kong, explained that CAAC’s warning to Cathay Pacific was particularly threatening because most of its flights to North America and Europe pass through Chinese airspace. “Beggars can't be choosers,” he said.

Kwan added the incident could scare off foreign companies from making their Asian headquarters in Hong Kong, for fear their employees may accidentally irk Beijing.

Enrong Song (宋恩榮), a visiting professor at the same university, said it was obvious China’s government was behind the pressure on Cathay Pacific. This was shown by the announcements being made on government media earlier than on the airline’s website.

Rupert Hogg took over his post in 2017 when Cathay Pacific faced a net loss of HK$2.7 billion (US$344 million) due to fuel hedging. He promoted a “three-year plan” that helped the company emerge from debt in the first half of 2019, and saw a net profit of HK$1.35 billion (US$172 million).

Augustus Tang, who will take over from Hogg, served as managing director of the board for Cathay Pacific from 2007 to 2008. He later served as the managing director of the board for the parent company, Swire Group, until May 2017.

Cathay Pacific pressured by China timeline:

July 28. A Cathay Pacific pilot is arrested by the Hong Kong police for “rioting” during the 728 Central and Sheung Wan March.

Aug. 7. Global Times accuses Cathay Pacific ground staff of leaking flight information that Hong Kong police officers were boarding a plane.

Aug. 9. CAAC issued a “major safety warning” to Cathay Pacific, demanding it provided detailed crew lists for flights in China’s airspace.

Aug. 10. Two ground staff related to the leak of flight information are dismissed. The pilot accused of “rioting” is suspended.

Aug. 12. Another pilot uploads a photo of the cockpit and calls for citizens to join the protests at Hong Kong Airport.

Aug. 14. The two pilots are dismissed.

Aug. 16. Rupert Hogg and Paul Loo resign. Cathay Pacific states it supports “one country, two systems.”