Cathay Pacific Airways said CEO Rupert Hogg has resigned in a surprise announcement, amid mounting Chinese regulatory scrutiny of the Hong Kong flag carrier over the involvement of its employees in the city's protests. Augustus Tang, the head of Hong Kong Aircraft Engineering Company - which like Cathay is managed by Swire Pacific Ltd, will take over as the carrier's new chief.
The airline also said Paul Loo had resigned as chief customer and commercial officer, to be replaced by the head of its low-cost arm Hong Kong Express, Ronald Lam.
Cathay Chairman John Slosar said recent events had called into question Cathay's commitment to flight safety and security and put its reputation and brand under pressure. "This is regrettable as we have always made safety and security our highest priority," he said in a statement. "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."
Hogg said there had been "challenging weeks" and it was right for Loo and him to take responsibility as leaders. Hogg's resignation was first announced by Chinese state television, CCTV. It was unclear, however, if it would help revive the company's reputation on the mainland. "The roots are rotten. It doesn't make a difference no matter who's leading the company," a Chinese social media user said on the Twitter-like Weibo platform in a post liked more than 900 times.
Cathay, which has been under pressure from the Chinese aviation regulator, said it was fully committed to Hong Kong under the principle of "One Country, Two Systems" and was confident Hong Kong would have a great future. The airline, which is 30% owned by Air China, became embroiled in crosswinds between Beijing and pro-democracy groups in the Asian financial hub after some of its employees took part in the Hong Kong protests.
This week, Cathay terminated the employment of two pilots over their involvement in the protests, after being ordered by China's aviation regulator to suspend personnel who had engaged in illegal protests. Cathay last week reported its first profit for the January-June period since 2016 and said the second half was likely to be better despite a lower forward booking due to local unrest.
An analyst said Hogg had been highly regarded within the industry, having led a nearly completed three-year financial turnaround plan and the recent acquisition of HK Express. "It is disappointing to learn of his resignation particularly given this current challenging period," said the analyst, who was not authorized to speak publicly about personnel changes.