Cathay Pacific has just announced some shocking senior management changes. Obviously a lot has been going on in Hong Kong. There have been protests for months, and these have increasingly impacted the airport and airline over the past couple of weeks.

Rupert Hogg resigns as Cathay Pacific CEO

The Cathay Pacific Board of Directors has today announced that they’ve accepted the resignation of two senior executives:

Cathay Pacific’s CEO, Rupert Hogg, who has been in the position since May 2017, and has been at the Swire Group since 1986; by all accounts has done a great job bringing the airline back to profitability

Cathay Pacific’s Chief Customer & Commercial Officer, Paul Loo, who has been at the airline since 1991

Hogg said the following regarding his resignation:

“It has been my honour to lead the Cathay Pacific Group over the last three years. I am confident in the future of Hong Kong as the key aviation hub in Asia. However, these have been challenging weeks for the airline and it is right that Paul and I take responsibility as leaders of the company.”

As you can see, he says that it has been a challenging few weeks for the company, and that it’s “right” that he “takes responsibility” for this. So this isn’t a resignation based on spending more time with his family or whatever reason executives otherwise want to give, but rather very clearly is a response to what has been going on.

Here’s what Cathay Pacific’s Chairman, John Slosar, said about these resignations:

“Rupert Hogg and his team executed the three-year Transformation Programme which has been important to Cathay Pacific’s recovery and provides a strong platform for continued development. However, 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. Cathay Pacific is fully committed to Hong Kong under the principle of ‘One Country Two Systems’ as enshrined in the Basic Law.”

Cathay Pacific’s new executive appointments

Cathay Pacific has already appointed replacements:

Augustus Tang has been appointed CEO; he is currently the CEO of aircraft maintenance and engineering company HAECO, which has the same parent company as Cathay Pacific

Ronald Lam has been appoint Chief Customer & Commercial Officer; he was recently appointed CEO of HK Express, which Cathay Pacific acquired

What did Cathay Pacific executives really do wrong?

With protests in Hong Kong escalating, we’ve seen Hong Kong’s airport and largest airline increasingly be involved here.

For one, Hong Kong Airport closed a couple of times due to the number of protestors, bringing the airport to a standstill.

More specific to Cathay Pacific, the Chinese government has accused Cathay Pacific employees of participating in “illegal protests,” and requested that the airline start sharing all information about employees not only flying to China, but also passing through Chinese airspace.

The airline ended up firing a few employees who participated in protests.

As far as I’m concerned here, Cathay Pacific has done absolutely nothing wrong, and has balanced their interests best they can. They’re truly stuck between a rock and a hard place, and didn’t have much of a choice:

I believe fundamentally the company shares the sentiments of those who are protesting; obviously not the entire company, but at least a majority of the employees and much of the management

At the same time, defying China couldn’t possibly end well for them, given that China doesn’t exactly cave easily

So now you have this absolute mess of a situation. Cathay Pacific is putting a new management team in place to “reset confidence” after “Cathay Pacific’s commitment to flight safety and security” has been called into question.