Cathay Pacific Airways Ltd shares jumped as much as 3 percent after the carrier signaled a rise in first-half net income, driven by strong passenger and cargo demand despite the Iran war-induced oil-price shock.

The stock notched its biggest intraday gain in two weeks after the carrier Wednesday forecast HK$6 billion ($765 million) to HK$6.5 billion in profit, the second-highest in its history for the period, up from about HK$3.7 billion a year earlier.

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A HK$1.4 billion gain from the further dilution of Cathay’s stake in Air China Ltd — reduced to 12.85 percent from 15.05 percent — helped boost earnings.

Overall, Cathay’s financial performance is expected to be shaped by several factors — from elevated oil prices to a surge in passengers avoiding Gulf routes.

The Hong Kong carrier has been one of the biggest beneficiaries of Middle East travel disruptions, with passengers rerouting and choosing alternative airlines. Cathay’s passenger volumes between January to June rose 17.5 percent from a year earlier to 16 million customers.

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Like the rest of the aviation industry, the airline has absorbed a sharp jump in jet fuel costs due to the Iran conflict. Cathay’s hedging of 30 percent of its jet fuel needs has helped absorb costs, as well as moves to levy fuel surcharges on passengers and cargo.

Cathay’s air cargo division is likely to show strength through an uptick in freight including strong AI shipments, according to HSBC Holdings Plc’s Parash Jain.