Fuel costs to hit Cathay profits

Hong Kong-based airline Cathay Pacific has said its 2008 profits will be "disappointing" following a substantial rise in the cost of jet fuel.

The airline said a 60% rise in the average price of fuel had "adversely affected" its financial performance.

The volatility of the fuel price meant it could not estimate the effect on its profits this year, the firm said.

Higher costs have forced airlines around the world to cut jobs and reduce their schedules.

Cathay Pacific advised its investors to "exercise caution" in dealing with its shares.

Its shares closed 5.9% lower at 13.98 Hong Kong dollars. In October last year they were HK$23.

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