HK's Cathay Pacific loses $1.1bn

Hong Kong based airline Cathay Pacific has reported a loss of US$1.1bn, on the back of falling cargo demand and volatile fuel prices. Announcing the loss on Wednesday, the airline said it was bracing for "an extremely challenging year in 2009". In a statement to the Hong Kong stock exchange, Christopher Pratt, Cathay's chairman, said high oil prices in the first half of the year had hit the carrier's bottom line. The loss - the airline's first since the Asian financial crisis of 1998 - compares to a profit of US$900m for 2007.  Pratt said that the tumbling oil price in the second half of 2008 had also caused heavy losses from hedging contracts taken out to protect it against the previously high cost of fuel. "Having made a painful adjustment to high fuel prices, the aviation industry now has to adjust to a severe economic downturn," he said.