Cathay Pacific Airways lost $84.9 million in the first half of 2008 and it was entirely due to the relentless rise in the cost of jet fuel in recent months, said the company. The loss is particularly staggering considering that in the first half of 2007, the Hong Kong-based airline earned a profit of $330.7 million.

Group revenue increased 22.6 percent to $5.4 billion, with a significant increase in both passenger and cargo revenue. Fuel costs, though, jumped 60 percent to $132 per barrel, for a total fuel bill that rose 83 percent from $1.4 billion to $2.5 billion.

The fuel surcharges approved by the Hong Kong Civil Aviation Department in the first half were less than half of the increased fuel bill.

The amount of cargo carried by Cathay Pacific and Dragonair grew by 6.8 percent to 828,399 tonnes. The cargo load factor rose by 1.1 percentage points to 66.4 percent against a capacity increase of 6.9 percent. Yield fell 1.8 percent to HK$1.60 due to pricing pressures, the company said in its interim statement.

The Cathay Pacific Group in May took delivery of the first of six Boeing 747-400ERF Extended Range Freighters, which benefit from higher fuel efficiency. The Group also has 10 new-generation Boeing 747-8F freighters on order and at the same time has begun a program to retire the older, more inefficient Boeing 747-200/300F "Classic" freighters in its fleet. Two have already left - one from Cathay Pacific and one from Dragonair.

Shippers can expect to pay more on Cathay Pacific in the coming year as the company attempts to raise prices to cover additional fuel costs. While demand remains robust, the airline said it would not withdraw from any destination it now serves.