Hong Kong's Cathay Pacific Airways expects to reach a third of pre-pandemic passenger capacity by the end of the year, increasing a previous estimate of one quarter, after crew quarantine rules were lifted, it said on Friday.

Hong Kong last week announced it would end onerous rules that required crew members on passenger flights to quarantine in a hotel for three days on return to the city.

In August the airline's passenger capacity was only 16% of the same month in 2019 before the pandemic, meaning it expects that to double by the end of the year.

"While we will continue to add back more flights as quickly as is feasible to strengthen the network connectivity of the Hong Kong aviation hub, this will still take time as we build operational readiness and undertake a substantial amount of training and aircraft reactivation," Chief Customer and Commercial Officer Ronald Lam said in a statement.

He added that cargo, which has contributed the bulk of the airline's revenue during the pandemic, had experienced flat demand in the summer months ahead of the peak year-end season.

Cathay operated 59% of its pre-pandemic cargo capacity in August and forecast it would reach around two-thirds of 2019 levels by the end of the year.

Earlier this month, the airline warned this year's peak cargo season may be weaker than last year's due to inflation and China's zero-COVID policies. (Reporting by Jamie Freed in Sydney Editing by David Goodman and Louise Heavens)