Cathay Pacific has reported a profit for the first time in three years.

The Hong Kong-based carrier earned a HK$2.35 billion ($300 million) profit for the year ended December 31st, as it benefited from rising airfares and a turnaround plan designed to lower costs and boost revenue

Cathay said it was “reasonably optimistic” about passenger and cargo markets in 2019, despite recognising challenges ahead.

These include geopolitical discord, global trade tensions and intense competition that could dampen cargo demand as well as passenger demand particularly on long-haul routes in economy class, chairman John Slosar said in a statement.

The result was in line with guidance for a profit of HK$2.3 billion issued on February 20th.

The airline lost HK$1.25 billion in 2017.

Cathay reported HK$111 billion in revenue for 2018, up 14.2 per cent, driven by passenger and cargo businesses.

This year, Cathay plans to “compete hard” by extending its route network to destinations not currently served from Hong Kong, increasing frequencies on its most popular routes and operating more fuel-efficient aircraft, Slosar said.

He added: “In 2017, we built the foundations for our transformation programme.

“In 2018, we restructured our operations outside Hong Kong, benefited from a series of productivity improvements, increased our digital capabilities and concentrated on global business services.

“We improved inflight dining, passenger comfort, the way in which we contact passengers and our loyalty programmes.”