Hong Kong - Hong Kong's flagship airline Cathay Pacific Wednesday released disappointing passenger figures and warned that the outlook for the industry was "challenging."

The airline's passenger figures combined with sister airline Dragonair for October 2008 were up 2.6 per cent compared to the same month in 2007, however, capacity over the same period grew 11.6 per cent.

The amount of cargo and mail carried over the course of the month, was down 7.4 per cent to 114,466 tons compared to the same month last year, Cathay Pacific announced.

For the first 10 months of 2008, the number of passengers carried by Cathay Pacific and Dragonair was up 9.2 per cent year on year compared to a capacity growth of 14.2 per cent.

The release of the figures comes after a profit warning was issued by Cathay Pacific last week amid signs that the global economic downturn and fluctuations in fuel prices are having a hefty impact.

The airline's general manager for revenue management, Tom Owen, said: "We saw continued weakness in our passenger traffic in October despite capacity growth.

"October is traditionally one of the busiest months for corporate travel but the peak didn't materialize this year. Demand to and from Hong Kong remained depressed, particularly on the corporate sales side."

Owen added: "We also continue to see the fallout from the financial crisis on most long-haul routes as well as regionally, reflecting a tightening of corporate travel policies and reduced travel for both business and leisure. The outlook remains challenging."

Cathay Pacific, which in August announced its first quarterly loss since the SARS crisis of 2003, carried 23.5 million passengers and 1.6 million tons of cargo in 2007. It employs more than 27,000 people worldwide. (dpa)