Cathay Pacific first-half profit up nearly sixfold

Hong Kong flag carrier Cathay Pacific Wednesday said first-half profit rose to HK$1.97 billion ($254 million) from a year earlier, helped by lower fuel prices, but the result missed expectations due to hedging losses.

Net profit for the first six months of the year was up nearly six times, but revenue for the period fell 0.9 percent to HK$50.39 billion.

The airline said the growth was due to a 35 percent, or a HK$7.08 billion, decrease in fuel costs and increase in passenger and cargo capacity.

"The group's performance in the first six months of 2015 was considerably better than in the same period in 2014," Cathay Pacific chairman John Slosar said.

"We expect our business to do well in the remainder of 2015."

But the results missed the median estimate of six analysts polled by Bloomberg, who were expecting a net profit of HK$2.22 billion.

The airline said it lost HK$3.74 billion in fuel hedging losses after a slump in crude oil prices last year, and warned it still faces "strong competition" from other airlines.

At last year's first-half results, the airline had warned of a "challenging" outlook in the face of surging competition.

A fall in fuel prices and a rise in the number of flights that are filled to capacity means airlines are expected to make $29.3 billion, more than a previous estimate, in collective profit on revenues of $727 billion in 2015, the International Air Transport Association said in June.