The Lion Rock Institute’s response to the government’s bailout of Cathay Pacific
The Lion Rock Institute Director Andrew Shuen said:
“The Lion Rock Institute is steadfastly against the bailout, as it will ultimately be detrimental to Hong Kong’s aviation industry by reducing incentive for managements of airlines to fully adapt to a post coronavirus world.”
“Furthermore, by becoming a part owner of an operator. The government will now have incentive to ‘ensure success’ by eliminating any potential competition. Hence harming all consumers of Hong Kong’s aviation industry and retarding innovation in the sector.”
“We do not find this bailout to be of Cathay Pacific, but rather its equity owners and creditors. With the public kept ignorant of who are benefitting, this raises serious issues of propriety. We firmly believe the company itself would have survived and thrived if the financial structuring be done without any government involvement.”
About LRI: The Lion Rock Institute is the Free Market Think Tank in Hong Kong. The Institute ranked No.2 among the Hong Kong think tanks, according to the University of Pennsylvania’s 2018 Global Go To Think Tank Index Report.