Cathay Pacific has posted an unexpected first-half net loss amid higher fuel costs and a drop in demand for corporate travel.

The carrier lost HK$935m ($120.6m; £77.2m) for the six months to June. Analysts had forecast a modest profit.

It had made a profit of HK$2.8bn during the same period last year.

The airline industry has struggled with higher fuel prices and slowing demand due to Europe's debt crisis and a slowdown in the US economy.

"Increased fuel prices significantly affected the profitability of our passenger services, particular on long-haul routes operated by older, less fuel-efficient aircraft," the carrier said in a statement.

Cathay said in May that it would start using more fuel-efficient aircraft and reduce its capacity to cut costs.

The Hong Kong-based carrier said that demand for premium class travel also fell during the period "as employees of major corporations started to travel less, in response to economic uncertainty."