Cathay Pacific saw its profits fall 83% last year, blaming  fuel prices and the global recession, particularly in the eurozone.

The Hong Kong group  made £78.8 million in 2012, a sharp fall from the 2011 figure of £473.5 million. Turnover was up 1%. The figures include contributions from Dragonair and its 49% investment in Air China Cargo.

Cathay said passenger numbers, at 29 million, were up 5% but yields only rose 1.2%. The carrier said fuel remained its most significant cost, accounting for 41% of expenditure. It is also thought to have lost market share to others in the region and has suffered the consequences of not setting up a budget offshoot.

It added: “Uncertain economic conditions and strong competition on key routes put pressure on yields, while premium class yields were affected by travel restrictions imposed by corporations. The high cost of fuel made it more difficult to operate profitably, particularly on long-haul routes operated by older, less fuel-efficient aircraft.”

Cathay chairman Christopher Pratt said the airline’s financial position remained strong but warned that conditions remained “volatile and challenging”.

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