updated 1/4/2008 2:32:57 PM ET 2008-01-04T19:32:57

Despite rapidly rising passenger traffic on international airlines late in 2007, an industry trade group said Friday it was concerned by the likelihood of slower demand growth in 2008.

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Passenger traffic, as measured by revenue-per-kilometer flown, increased 9.3 percent in November compared with the same month last year, according to the International Air Transport Association's latest data. Through the first 11 months of 2007, passenger traffic rose 7.5 percent compared with last year, the trade group said.

International air-freight demand also grew in November, but the 3.5 percent jump was down from October's 3.6 percent growth. Through November, freight demand is up 3.9 percent compared with the year-ago period.

The outlook for 2008, however, is less rosy.

"We ring in 2008 with a warning bell," IATA Chief Executive Giovanni Bisignani said in a release. "Passenger demand growth is expected to fall to 5 percent. And the expected increase in freight demand growth to 4.3 percent will only help us recover some of the ground lost against sea shipping."

High oil prices and the global credit crunch also will cause industry profitability to fall to $5 billion this year from $5.6 billion in 2007, which was the first profit since 2000, Bisignani said.

Fuel costs, at 25.4 percent, accounted for the largest chunk of U.S. airlines' operating expenses in the second quarter of 2007, and are expected to represent about 28 percent of global expenses in 2007, according to domestic and international trade groups.

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