Cathay Pacific Group returned to profitability in 2009, recording a $52.7 million operating profit, up from a $369 million loss in 2008.

But although business improved in late 2009, the company is cautious in its outlook for the year, as it said business was not back to pre-recession levels and premium passengers have not fully returned.

Hong Kong-based airline Cathay Pacific has slashed capacity and cut costs in response to “deteriorating” business conditions, a week after Qantas made a similar announcement.

Starting from May, the airline will reduce passenger capacity by 8% and overall cargo capacity by 11%; sister airline Dragonair will see a 13% cut in capacity.

There will be a reduction in flight frequencies or seat capacity to cities such as London, Paris, Seoul, Mumbai and Sydney, but flights from Auckland to Hong Kong aren’t affected at this stage.