Cathay Pacific chief quits as Hong Kong edges towards recession

With staff taking part in protests rocking Hong Kong, the airline's Rupert Hogg stepped down 'to take responsibility'.

    Rupert Hogg has stood down as CEO of Cathay Pacific as protests roil the city [Jerome Favre/EPA/EFE]
    Rupert Hogg has stood down as CEO of Cathay Pacific as protests roil the city [Jerome Favre/EPA/EFE]

    The boss of Hong Kong carrier Cathay Pacific Airways resigned on Friday, the highest-profile corporate casualty of unrest roiling the former British colony, after Beijing targeted the airline over staff involvement in mass protests.

    The abrupt departure of Chief Executive Rupert Hogg, a move the company said was "to take responsibility... in view of recent events", shows how much pressure China is piling on corporate giants and the city as it seeks to snuff out the protests.

    Cathay Pacific, an emblem of the city, was blindsided last week when China's aviation regulator demanded it suspend staff supporting a movement that has mushroomed from opposition to a legal change in Hong Kong into wider calls for democracy.

    China's aviation regulator demanded any staff involved or supportive of the protests be removed from duty on flights to or over mainland airspace. Cathay shares hit a 10-year low.

    The company, whose chairman had said before the demand that it "wouldn't dream" of telling staff what to think, later acceded to the request, firing two pilots and saying "overly radical" staff would be suspended from mainland duties.

    Hogg said these had been "challenging weeks" for the airline and it was right for him, and the company's chief customer officer who also abruptly quit, to take responsibility.

    "Cathay Pacific is fully committed to Hong Kong under the principle of 'one country, two systems,'" the airline said in a statement.

    Fighting for 'one country, two systems'

    Demonstrators say they are fighting the erosion of the "one country, two systems" arrangement that enshrined some autonomy for Hong Kong since China took it back from Britain in 1997.

    Police have granted permission for a rally called "Stand with Hong Kong, Power to the People" planned in the central business district on Friday night. But they have banned other protests planned for the weekend.

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    A rally set for Sunday by the Civil Human Rights Front, which organised million-strong marches in June, has only been allowed permission for an assembly in Victoria Park on Hong Kong island, not a march, due to safety concerns.

    The group is appealing the police decision.

    Another march planned in Kowloon's Hung Hom district on Saturday has also been banned.

    Ten weeks of confrontations between police and protesters have plunged Hong Kong into turmoil and present the biggest popular challenge to Chinese President Xi Jinping since he came to power in 2012.

    Police tactics against protesters have been hardening as the tenor of clashes intensified this week. Thousands of flights were cancelled amid ugly scenes at the city's airport when protesters set upon men they suspected were Chinese agents.

    "Any person who endangers the safe operation of the aerodrome or the safety of persons in the aerodrome by act of violence is liable to life imprisonment," Acting Chief Superintendent Man-pun Yeung told reporters on Friday.

    Nearly 750 people have been arrested since the protests began in June and tear gas has frequently been used by police in attempts to disperse protests across the city.

    China has likened the protests to terrorism and warned it could use force to quell them, as US President Donald Trump urged Xi to meet protesters to defuse the tension.

    Chinese security forces have been gathering this week in Shenzhen, which borders Hong Kong, in a clear warning to the protesters. Hong Kong police reiterated on Friday they were capable of maintaining law and order on their own.

    On the verge of recession

    On Friday, the city's richest man, Li Ka-Shing, urged people to "love China, love Hong Kong and love yourself" in newspaper advertisements that marked his first comments on the crisis.

    But Li, 91, a fixture of Hong Kong business who founded CK Asset Holdings Ltd and chaired CK Hutchison Holdings, stopped short of explicitly backing the Hong Kong government, as many business leaders have done.

    I think the government heard the messages from the protesters loud and clear and is diligently racking their brains now for solutions

    Li Ka-Shing

    He made no reference to supporting the government or its embattled leader, Carrie Lam, in the advertisements, which encouraged freedom, tolerance and the rule of law. Many businesses, including other major property developers, have publicly backed Lam's administration and the city's police.

    "I think the government heard the messages from the protesters loud and clear and is diligently racking their brains now for solutions," Li said. "The best cause can lead to the worst results."

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    Hong Kong is now on the verge of its first recession in a decade as protests scare off tourists and bite into retail sales in one of the world's most popular shopping destinations.

    The economy shrank 0.4 percent in April-June from the previous quarter, revised government data showed on Friday, and conditions have sharply deteriorated since then as demonstrations spread, closing the airport and paralysing prime shopping areas.

    Plummeting Hong Kong stock prices have, however, attracted Chinese investors.

    Hong Kong, Asia's financial centre which boasts one of the world's busiest ports, was already under intense pressure from the escalating US-China trade war and Beijing's biggest economic slowdown in decades.

    The city's government confirmed on Friday it was slashing its full-year 2019 growth forecast to a range of zero to one percent from the previous two to three percent, which it had flagged a day earlier when it announced a modest economic support package.

    The quarterly contraction in gross domestic product was slightly worse than an initial estimate of -0.3 percent, released just a few weeks ago, and pointed to a sharp deceleration from 1.3 percent growth in the first quarter.

    Two successive quarterly contractions would meet the standard definition of a recession.

    SOURCE: Al Jazeera and news agencies