Cathay Pacific CEO Becomes Sacrificial Lam(b)... - Matthew Klint

Cathay Pacific CEO Rupert Hogg has suddenly resigned, raising more questions than answers. Who forced him out? And why did he take the fall for matters far beyond his control?

Hogg, who has been with Swire Group, Cathay Pacific’s parent company, since 1986, resigned along with Chief Customer & Commercial Officer Paul Loo.

In a written statement on his resignation, Hogg said:

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.

Take responsibility for what? I’ve stayed away from opining on the Hong Kong protests on this blog as I seek to carefully understand the situation. But this resignation strikes me as something rotten in Denmark. Hogg is widely credited with turning Cathay Pacific around over the last few years, make the airline more efficient and profitable.

How can Hogg take the sword for the rogue actions of a couple pilots, who were promptly terminated (one also under questionable circumstances)? Even if “the buck stops here” with the CEO, how can Hogg be blamed for protests which shut down HKG for two days? Or for a minority of his employees to actively support the sincere groans for freedom expressed by protestors?

The Puppet Speaks

John Slosar, Cathay Pacific’s Chairman, said:

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.

Commitment to flight safety and security? Because one pilot leaked internal info and was fired for it? Or because Beijing is absolutely terrified that dissent will spread to the nation of Taiwan? Or because Beijing censored all coverage of the protests until it could twist and manipulate it to place protestors and Cathay Pacific in a bad light? The last statement from Slosar just gives away Cathay Pacific bowed to pressure from Beijing…

New Leadership

In the meantime, Cathay Pacific has appointed replacements for Hogg and Loo.

Augustus Tang has been appointed CEO (currently the CEO of HAECO, an aircraft maintenance and engineering company also owned by Swire)
Ronald Lam has been appoint Chief Customer & Commercial Officer (recently appointed CEO of HK Express, now owned by Cathay Pacific)

CONCLUSION

My title is a play on Lamb and Lam, referring not to Ronald Lam, the new Chief Customer & Commercial Officer, but Carrie Lam, Hong Kong’s Chief Executive.

Cathay Pacific also added:

We would like to reiterate our firm support for the Hong Kong SAR Government, the Chief Executive and the Police in their efforts to restore law and order.

Hogg becomes the lamb for Lam, the troubled leader who should be the one to go instead of Hogg. Anyone who argues Hogg forfeited his role by reacting instead of acting proactively must defend how Lam botched her handling of an unjust extradition bill then reacted by backtracking far too late…it seems to me she should be the one to go, not Hogg.

Cathay Pacific’s tragic kowtowing to the Mainland authorities may not be a surprise, but that doesn’t make it any less tragic.

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