First Airline casualty of Hong Kong Troubles
The Hong Kong Protests have just gained their first three airline casualties.
Rupert Hogg the British CEO of Cathay Pacific has resigned as a result of the Hong Kong protests leading to a plunge in the airline’s share price. Not to mention the pressure from the Chinese mainland government on the airline to stop its employees participating or indicating support for the protesters.
The Chief customer and commercial officer, Paul Loo has also resigned, and one of Cathay’s pilots arrested during the protests has been sacked.
Well, Cathay is under attack. Its share price is falling. A number of Chinese firms have been boycotting the airline, and it didn’t quite come out fast enough with statements that were anti-protester and pro-China.
In July, Cathay was drawn into the dispute, when one of its pilots was arrested during the protests. Cathay’s initial statements indicated that its staff had the freedom to express themselves. This did not go down well with Beijing, which would have preferred Cathay to condemn any staff supporting let alone participating in the protests.
It has been reported that the company Chairman, John Slosar, said that he:
“. . . certainly wouldn’t dream of telling staff what to think.”
Oops! Alright to say that if you believe in democracy, but that’s not really the Beijing way.
The announcement of the resignation was made on Chinese state media, which adds fuel to the suspicion that the resignations are either dictated by or have been submitted to placate Beijing. If not, why else would you choose not to make the announcement through Hong Kong communications channels?
Cathay executives had since made various statements to placate Beijing, indicating that they do not support ‘illegal activities’ etc etc.
The protests in the airport have not helped matters, with Cathay cancelling over 200 flights, and the share price falling on Tuesday to its lowest point in a decade. Cathay’s share price has already suffered from the slowing in the Chinese economy.
All this has combined to leave Cathay with no other course of action, but to indicate a change in regime, offering the possibility of a more pro-Beijing line.
Did they jump, or were they pushed is the obvious question?
I suspect a little of both. Placed in this position, between an ethical position that will put you out of business, and a political position that will keep you in business, but at the expense of supporting democracy – I think the better position is to leave. You’re not going to win taking either position, so best walk away to fight another day?
I would not like to be in Cathay Pacific’s owning shareholder, the Swire Group’s shoes at the moment. Although I wouldn’t mind their wealth.