HONG KONG - HONG Kong's Cathay Pacific said on Wednesday an increase in passenger growth for October was much lower than its increase in capacity during the month, normally a busy period for corporate travel.

The airline said in a statement that it and its affiliate Dragonair carried a total of 2,091,339 passengers in October, up 2.6 per cent year on year but some way behind its 11.6 per cent growth in capacity.

For the year to October, the number of passengers surged 9.2 per cent, compared with a 14.2 per cent rise in capacity, which is measured in available seat kilometres - when a seat that is available is flown one kilometre.

Cargo traffic for the month dropped 7.4 per cent to 144,466 tonnes, while capacity fell 2.6 per cent, compared to a year ago.

Mr Tom Owen, Cathay's general manager in revenue management, said the airline's outlook remained challenging as passenger demand to and from Hong Kong remained depressed, particularly on the corporate sales side.

'October is traditionally one of the busiest months for corporate travel but the peak didn't materialise this year', he said.

'We also continue to see the fallout from the financial crisis on the most long-haul routes as well as regionally, reflecting a tightening of corporate travel policies and reduced travel for both business and leisure'.

Cathay issued a profit warning last week on the back of a slowdown in passenger demand and losses on fuel hedging contracts. -- AFP