Fuel-hedging gains have helped Cathay Pacific Airways swing into profit for the first half of 2009, despite a 27 percent slump in revenue.

The airline reported a net profit of HK$812m (US$104.8m) for January-June, compared with a loss of HK$760m a year earlier.

Chief executive Tony Tyler said the fall in demand had reached the bottom, but remained cautious for the rest of the year, with fuel prices remaining the biggest concern.

“The global aviation industry, hit hard by soaring fuel prices in 2008, is now having to confront one of the most severe demand downturns in living memory,” he said in a statement to the Hong Kong Stock Exchange.

“There are cautious signs that the fall in demand has bottomed but there is, as yet, no indication when a sustained pick-up will begin.”

He said Cathay, Asia’s No.4 carrier since being overtaken by Japan’s All Nippon Airways in the No.3 spot, had taken measures to weather the downturn but would take further steps should the cost and demand situation not improve.

Revenue fell 27 percent to HK$30.9bn. The figures came in at the lower end of analyst forecasts, which ranged from HK$400m to HK$3bn because of widely varied estimates for fuel hedging gains.

Cathay’s fuel-hedging contracts in the first six months yielded mark-to-market gains of HK$2.1bn, compared with a loss of HK$7.6bn for full-year 2008, the company said in the statement.

The Hong Kong based carrier is currently taking delivery of a new, more efficient aircraft, with two more Boeing 777-300s entering the fleet in the first half and the last of six Boeing 747-400 arriving in April.

The airline is also accelerating the retirement of its older, less fuel-efficient Boeing 747-200/300 classic freighters.

The Asian stalwart airlines have been partly hard hit by the downturn. Singapore Airlines, the world’s second-largest airline by market value, last week announced its first quarterly loss in six years, and warned that it could post an annual loss if adverse conditions continued.