* Cathay sees smaller drop in ticket prices in second half of year
* Analyst says worst is nearly over, outlook to improve from 2018
* Shares jump as much as 6 percent to 10-day high (Adds executive comments, closing share price)
SINGAPORE, Aug 17 (Reuters) - Cathay Pacific Airways Ltd shares rose as much as 6 percent on Thursday, as analysts said they believed losses had bottomed for the Hong Kong airline after it reported its worst first-half result in at least two decades.
The carrier, in a briefing with analysts on Wednesday, said the corporate travel market was recovering and passenger yields, a proxy for ticket prices, would see a smaller drop in the second half than the 5.2 percent fall in the first six months.
"We see some bottom out effect in some routes in terms of lower fares," Cathay Chief Customer and Commercial Officer Paul Loo said in a webcast of the briefing, which was not open to members of media. "It is from a low base but at least the continuous decline is narrowing."
These comments spurred optimism among analysts, with Crucial Perspective's Corrine Png saying "the worst was nearly over" for the carrier, that in recent years has seen its market share on international routes eroded by aggressively expanding mainland Chinese and Gulf airlines. Poor fuel hedges and its lack of a budget arm have also hurt Cathay's competitiveness.
Its first-half loss was worse than expected, but the outlook will improve from next year with forward bookings suggesting stronger passenger revenue growth, Png said.
Overall airfares in Asia are expected to rise in 2018, by 2.8 percent according to the Global Business Travel Association, as stronger economic growth drives demand for business travel.
On Wednesday, Cathay reported a six-month loss of HK$2.05 billion ($262 million), versus a profit of HK$353 million a year ago, putting it on track for its first ever back-to-back annual loss since it was founded in 1946.
"The first half was an ugly combination of one-offs and non-structural costs," CAPA Centre for Aviation analyst Will Horton said. "The good news is that the core airline operation excluding fuel hedging did surprisingly well given even greater over-capacity in all long-haul segments."
Broker Daiwa upgraded Cathay to a "hold" recommendation from a "sell" due to recovery in cargo yields, while Jefferies maintained a "buy," saying losses had bottomed.
In an update on its July performance released after the market close on Thursday, Cathay said business traffic had continued to improve but passenger yields had remained under pressure during the month.
The airline has cut 600 jobs at its head office in Hong Kong, the biggest job losses in nearly two decades, as part of a broader plan to help return to profitability.
Cathay's Loo said the carrier will launch seasonal routes to destinations like Barcelona, Spain and Christchurch, New Zealand as part of its strategy. "We will fail early if necessary but we will take more risks in trying out new destinations."
Cathay shares closed about a percent higher at HK$11.80, after earlier hitting a 10-day high of HK$12.42, versus the benchmark index that closed down 0.2 percent. ($1 = 7.8218 Hong Kong dollars) (Reporting by Jamie Freed; Editing by Himani Sarkar)