HONG KONG – Cathay Pacific Airways has announced a tumble in profits in the first half of 2016, likely a result of economic weakness and cutthroat competition from rivals.

Hong Kong’s biggest airline posted an interim net profit of 353 million Hong Kong dollars ($45.5 million), down 82% from the same period a year earlier.

The airline said its earnings were hurt by “economic fragility and intense competition” in the January-June period, putting sustained pressure on revenue, which fell 9.2%.

The company, which also operates regional carrier Cathay Dragon, said passenger numbers rose 2.7% but the money it earned from them fell 10%.

Cathay said mainland China’s economic slowdown and weak conditions elsewhere cut into demand for lucrative business class seats from corporate customers.

Fuel costs, the airline’s biggest expense, helped offset the poor performance somewhat. They fell by 20% to HK$3.4 billion after losses from hedging contracts were taken into account.

“We expect the operating environment in the second half of the year to continue to be impacted by the same adverse factors as in the first half,” Chairman John Slosar said in a statement. “The overall business outlook therefore remains challenging.”

On a more positive note, the airline also recently announced it will be increasing its checked luggage allowances. According to BoardingArea, passengers in all classes will get an extra 10kg in luggage allowance, effective Sept. 15, 2016.

With file from The Associated Press