Further management shuffle rumours circle Cathay Pacific following top level resignations

Update 20/8/2019

Cathay Pacific Airways has announced the appointment of Mandy Ng as the new CEO of the budget airline HK Express with immediate effect

After a turbulent week, Cathay Pacific remains mired in a PR crisis related to Hong Kong’s ongoing protests, with high-level resignations at the company on Friday now being attached to various rumours, as well as reports that Swire Group plans to implement additional management changes in its wake.

On the afternoon of Friday 16 August, Cathay Pacific announced that its board of directors had accepted the resignation of both its CEO Rupert Hogg, and its chief customer and commercial officer, Paul Loo.

The company swiftly filled Hogg’s vacancy with the CEO of Swire Group’s Hong Kong Aircraft Engineering Company Limited (HAECO), Augustus Tang. Meanwhile, Loo’s chosen replacement was HK Express CEO Ronald Lam. Though Lam was appointed as CEO of HK Express as recently as July, he will remain at that position until a successor has been appointed.

“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,” said John Slosar, chairman of Cathay Pacific.

He added, “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.”

These resignations have followed a massive backlash and drop in share price for Cathay in response to in-house communications stating that Cathay Pacific employees who took part in or showed support for the ongoing protests in Hong Kong would not only be barred from serving on flights crossing Chinese territory but could also face disciplinary action, up to and including termination. This was itself a reaction to complaints and demands made by the  Civil Aviation Administration of China.

Hogg has apparently taken responsibility for the way the airline had responded to recent events in Hong Kong. According to a report by Bloomberg, Hogg stated he has been“at the forefront of this crisis and must take responsibility for the way it has been managed.” He reportedly added, “Could we have managed things differently? In hindsight, ‘Yes’.”

The resignation was first reported by – in what some have called out as an unusual occurrence – China’s state broadcaster CCTV. The broadcaster stated that Hogg had quit his position, but neglected to mention from where it had gotten this information, adding more fuel to speculations that these resignations were the result of direct pressure from Chinese authorities.

Online rumours also began spreading that Hogg had been ordered to supply mainland security authorities with a list of every Cathay Pacific employee that had taken part in the citywide 5 August strike and protest, but that he had responded by supplying a list with only one name on it, his own. These rumours have yet to be verified.

Things only got more complicated on Sunday, when Cathay issued a statement regarding a public letter published online – which claimed to be written by members of Cathay’s staff – calling for citizens to take part in the upcoming mass protest on 18 August.

In an official statement, Cathay said, “while we cannot confirm the authenticity of this letter, we are taking the matter very seriously and are conducting an internal investigation.”

The airline also reassured the public that “our ever-present focus is to ensure safe and secure operations for our customers and staff. We abide by the rules and regulations of the Hong Kong Civil Aviation Department and those of all the countries we serve and over whose airspace we fly. Cathay Pacific will comply with the Civil Aviation Administration of China (CAAC) safety directives at all times.”

But in yet another twist, CCTV has now reported that the management team at – major shareholder – Swire Group has been angered by the controversies surrounding the airline in regard to the extradition bill protests. The broadcaster’s report cited an unnamed insider at Swire Group as saying there were plans to enact further management changes at the airline in future.

With its takeover of HK Express and various headlines regarding the censorship of an LGBT-positive ad for the company, Cathay Pacific was already having an interesting 2019 before this latest state of affairs. One can only wonder how much more interesting it will get if more heads indeed roll.