Geneva: Airline passenger demand ticked up slightly in September but freight demand continued to fall, the International Air Transport Association said on Thursday.

IATA data showed passenger demand was 0.3% higher in September than a year earlier, while freight demand fell 5.4%. But the year-on-year increase in passenger demand reflected a particularly weak September 2008, it said.

“It is far too early to call this a recovery. The worst may be over in terms of the fall in demand, but (average fare) yields continue to be a disaster, and costs are rising,” IATA Director-General Giovanni Bisignani said.

“The airline industry remains firmly in the red, with a fragile business environment.”

Passenger demand is now 5% above the low reached in March this year, but 6% below its peak in early 2008. Cargo traffic is 12% above its December 2008 low, but 17% below the peak early last year, IATA said.

Air freight, a barometer of the strength of world trade, tends to pick up early in the economic recovery cycle when businesses start to replenish their inventories.

IATA represents 230 airlines including British Airways, Qantas, United Airlines, Cathay Pacific and Emirates. It forecasts the sector will lose $11 billion on a net basis this year and $4 billion in 2010.