Cathay goes from profit to loss

Cathay is not alone in having to deal with the impact of surging fuel prices

Hong Kong-based airline Cathay Pacific has reported a half-year loss as a result of higher fuel costs.

The carrier reported a net loss of 663m Hong Kong dollars ($84.95m; £43.4m) in the six months to June, compared with a profit of $HK2.58bn a year earlier.

"Global aviation is making a painful adjustment to the new reality of $100+ oil" said chairman Christopher Pratt.

Many carriers have been hit by rising fuel prices and have reacted by cutting routes and raising fares.

On Tuesday, Spanish airline Iberia reported a half-year loss and Air France-KLM said that second-quarter profits had fallen by 60%.

Cathay Pacific said it was cutting costs where it could but that there was a limit to how much could be saved before quality and its brand were compromised.

A report by the International Air Travel Association (IATA) issued on Monday said that the situation for the airline industry would get "a lot worse", and that the sector could see losses of $6.1bn (£3bn) this year.