HONG KONG (AP) -- Cathay Pacific Airways Ltd. scratched out a small first-half profit as weak global demand continued to batter its air cargo business.
The carrier said Wednesday it earned 24 million Hong Kong dollars ($3.1 million) in the January-June period. That's a turnaround from the restated HK$929 million it lost in the same period last year, but much less than the HK$934 million forecast by a FactSet survey of analysts.
Hong Kong's biggest airline said cargo revenue fell 5.2 percent to HK$11.3 billion from the year before. Demand has been weak since April 2011, Chairman Christopher Pratt said in a statement.
"There is still no sign of sustained improvement," Pratt said.
Cathay, the world's biggest international air cargo carrier, said it faced stronger competition on cargo routes to Europe. It halted service to Brussels and Stockholm in February because of the weak demand.
The company said it also faced strong competition for shipments from Shanghai. It cut its schedule to the mainland Chinese city of Zhengzhou in half because of reduced demand from major high-tech manufacturers.
Demand for air freight from Japan was "significantly weaker," with the slide in Japan's yen not yet helping to revive export volumes.
The company is adjusting to the lower demand by carrying more air cargo in the bellies of passenger jets rather than in dedicated freighters. It expects to save more money once its new HK$5.5 billion air cargo terminal at Hong Kong's airport is fully operational later this year.
The passenger business saw a slight improvement as the number of passengers carried by Cathay and its Dragonair affiliate rose 1.3 percent to 14.5 million. Passenger revenue rose by 0.8 percent to HK$35 billion.
But it earned less money from passengers in North Asia as travel was hurt by the outbreak of bird flu in China and North Korea's war rhetoric in response to U.S.-South Korea military drills.
The high price of jet fuel continued to have an "adverse" effect, especially on long-haul routes.
Cathay said the amount it spent on fuel fell 8.5 percent to HK$18.7 billion, but it still remained the airline's single biggest expense.
The airline also lost HK$155 million from associated companies, reflecting a poor performance at Beijing-based Air China, in which Cathay has a 20 percent stake.
First-half revenue slipped 0.6 percent to HK$48.6 billion. The company will pay a dividend of 0.6 cents a share.