Cathay Pacific Airways is expected to suffer from Canadian Airlines' withdrawal from the oneworld alliance. Canadian Airlines, a founding member of oneworld, announced last night it would join the Star Alliance by June after merging with Air Canada. The merger will deprive Cathay of its code-share deal with Canadian Airlines and effective monopoly of routes between Hong Kong and Canada. Through the code-share deal, Cathay flew to Canadian destinations 28 times a week. Cathay returned to profit last year, posting a larger than expected net profit of $2.19 billion due to a sharp upturn in demand in the second half of the year. Meanwhile, Cathay announced it carried 5.27 per cent more passengers and 11.26 per cent more freight in January than in the same month last year, as the economic recovery spurred more people to travel and demand for Asian exports remained strong. Revenue per passenger-kilometre rose 2.36 per cent, helped by an 8 per cent recovery in North Asia and a 6.38 per cent rise in Southeast Asia and the Middle East. 'Market conditions in January remained favourable,' Cathay general manager for network revenue Ian Shiu said yesterday. However, revenue per passenger-kilometre for the Pacific and South Africa fell 1.32 per cent. Cathay's capacity contracted as available seat-kilometres fell by 6.24 per cent and available cargo-kilometres fell 5.11 per cent due to Cathay retiring some of its old Boeing 747 aircraft. It carried 900,000 passengers in January, compared with 850,000 in the same period last year.