Cathay Pacific Airways Ltd.’s operating environment remained challenging in the first half of the year, Chief Executive Officer Rupert Hogg said, dashing expectations of an early recovery for the carrier that’s cutting jobs following the first annual loss in eight years.

“We said that we expected the operating environment in 2017 to remain challenging,” Hogg said in a statement the premium airline sent to the stock exchange Tuesday. “This has been the case. Our airline’s performance in the first half of 2017 continued to be disappointing.”

Cathay Pacific shares have rallied 23 percent this year as the airline embarked on a three-year transformation that included eliminating 600 jobs in the company’s biggest revamp in two decades. Challenges at Hong Kong’s marquee airline and its rival Singapore Airlines Ltd. show how some of Asia’s biggest airlines are faring amid intense competition from Chinese and Middle Eastern rivals, and a surge in capacity that is pummeling ticket prices.

Hogg said strong competition from other airlines is putting “intense and increasing pressure” on passenger yield, or the money an airline gets from carrying a passenger for a kilometer. The company’s annual passenger yield fell to the lowest level in seven years in 2016.

The carrier is scheduled to announce its first-half earnings mid-August.

Hogg took over as the airline’s chief in May, facing one of the toughest turnaround jobs in Asian commercial aviation. Once a dominant player in Asia’s premium air travel market with few serious rivals, Cathay Pacific has hit an air pocket, despite the booming travel demand in the region.

Cathay Pacific is expected to report a full-year loss of HK$1.44 billion ($185 million) this year, according to the average estimate of 18 analysts compiled by Bloomberg. Hong Kong’s Swire Group owns 45 percent of Cathay Pacific.

Another Swire unit warned of deterioration in performance. Hong Kong Aircraft Engineering Co., 75-percent owned by Swire, told the stock exchange Tuesday that it expects bigger losses at its U.S. operations. As a result, the company’s earnings before exceptional items for this year is set to be worse than 2016, it said. In 2016, the U.S. unit had a loss of HK$238 million, excluding impairment charges.

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Photo Credit: New Cathay Pacific CEO Rupert Hogg, who took over in May, said there's no quick fix for turning around the airline. Bloomberg