First half profits at Cathay Pacific soared to HK$347 million against HK$24 million in the first six months of 2013.

This came despite the Hong Kong-based carrier admitting that reduced passenger yield, high fuel prices and a weak performance by associated company Air China had a “significant negative impact” on the business.

Fuel remains the biggest cost, accounting for almost 38% of total operating costs, with rates rising by 5.2% year-on-year.

“Cathay Pacific continues to increase fuel efficiency by modernising its fleet. It is also focused on controlling costs,” the airline said while announcing interim results today.

Chairman John Slosar said: “The operating environment for the Cathay Pacific Group – and the aviation industry as a whole – remains challenging.

“We face significant competition in our passenger business. This makes it difficult to maintain yields. The air cargo business remains problematic because of excess capacity. Intense competition similarly puts pressure on yield.

“On the plus side, we continue to strengthen our passenger network and the connections available through Hong Kong.”

He added: “We expect business to be better in the second half of 2014. Our financial position remains strong and will enable us, despite the current difficult trading conditions, to maintain the quality of our products and services and to continue with our long-term strategic investment in the business.”

Passenger revenue in the first six months of 2014 increased by 4.4% to HK$36,520 million compared to the same period in 2013.

Capacity increased by 5.3% as new services to Doha and Newark were introduced and frequencies increased on existing long-haul routes.