Profits at Cathay Pacific soared by 204% last year to HK$2.6 billion (£201 million).
The rise in profits was largely attributed to an increase in travel to the Pearl River Delta in southern China, according to the carrier.
But Cathay warned that strong competition on Asian routes from both full service and low-cost airlines had put pressure on yields and high fuel prices remained a concern.
Chairman Christopher Pratt said: “The operating environment remained challenging throughout 2013, for the group and the aviation industry as a whole.
“It was therefore encouraging to see an improvement in our overall performance.”
The number of passengers carried rose by 3.3% to 29.9 million last year over 2012.
Business was strong on most European routes in 2013 with good demand for new premium economy class seats, particularly on routes from Hong Kong to London and Frankfurt.
However, capacity on European routes was reduced as smaller Boeing 777-300ERs were deployed instead of B747-400s on some services. Only B777s have been used to London since the start of the year.
A fifth daily flight on the London route was added in June 2013.
“Loads were consistently high in all classes. More passengers travelling on this route are connecting with flights to and from southwest Pacific and northeast Asian destinations,” Cathay said.
Pratt said the price of jet fuel – accounting for 39% of total costs – remained a concern. The airline took advantage of a drop in prices last April to extended its fuel hedging into 2016.
“The business outlook for 2014 looks to be improved when compared to 2013,” he added.
“Our passenger business continues to perform well and will benefit from further expansion of frequencies on long-haul routes. Fuel prices remain high but we will benefit from our hedging positions should they remain so.”