CORRECTED - CORRECTED-UPDATE 1-Cathay Pacific turns to profit on fuel-hedge

(Corrects attribution in bullet, 2nd paragraph to Cathay Pacific chairman Christopher Pratt, not chief executive Tony Tyler)

* Net profit HK$812 million, on HK$2.1 bln fuel-hedge gain

* Revenue declines 27 percent

* Fuel prices remain a concern - chairman

HONG KONG, Aug 5 (Reuters) - Hong Kong's leading air carrier Cathay Pacific Airways (0293.HK) swung to profit in the first half of 2009 as fuel-hedging gains made up for a 27 percent drop in revenue.

Chairman Christopher Pratt said the decline in demand had bottomed out, but warned of further difficulties ahead, with fuel prices remaining a concern.

"The global aviation industry, hit hard by soaring fuel prices in 2008, is now having to confront one of the most severe demand downturns in living memory," he said in a statement released by the Hong Kong stock exchange.

"There are cautious signs that the fall in demand has bottomed but there is, as yet, no indication when a sustained pick-up will begin."

He said Cathay had taken measures to weather the slump but would take further steps should the cost and demand situation not improve.

LOW-END OF FORECAST

The airline, Asia's No.4 carrier since being overtaken by Japan's All Nippon Airways (9202.T) in the No.3 spot, reported a net profit of HK$812 million (US$104.8 million) for January-June, compared with a loss of HK$760 million a year earlier.

The six-month result falls at the lower end of analyst forecasts, which ranged from HK$400 million to HK$3 billion because of widely varied estimates for fuel hedging gains.

Turnover fell 27 percent to HK$30.9 billion.

Cathay's fuel-hedging contracts in the first six months yielded mark-to-market gains of HK$2.1 billion, compared with a loss of HK$7.6 billion for full-year 2008, the company said in the statement.

The airline industry continues to face strong headwinds.

Singapore Airlines (SIAL.SI), the world's second-largest airline by market value, last week announced its first quarterly loss in six years, and warned that it could post an annual loss if adverse conditions continued. [ID:nSIN455944].

Cathay Pacific continues to take delivery of new, more efficient aircraft, with two more Boeing 777-300 extended range aircraft entering the fleet in the first half and the last of six Boeing 747-400 extended range freighters arriving in April.

At the same time the airline had accelerated the retirement of its older, less fuel-efficient Boeing 747-200/300 classic freighters, it added.

Shares of Cathay, a unit of conglomerate Swire Pacific Ltd (0019.HK), were up 2.4 percent at HK$12.94 at the end of the morning session. The stock has risen by 48 percent this year, outperforming the broader market's 44 percent gain. (Reporting by Nerilyn Tenorio; additional reporting by Alison Leung; Editing by Chris Lewis)