updated 10/24/2008 1:57:44 PM ET 2008-10-24T17:57:44

Passenger and cargo traffic on the world's airlines suffered an alarming decline in September amid the world's financial crisis, and airline losses may be even higher than $5.2 billion this year, an industry association said Friday.

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Passenger traffic declined 2.9 percent over September 2007 "the first time since the SARS crisis in 2003 that global passenger traffic has shrunk," said the International Air Transport Association, referring to Asia's outbreak of severe acute respiratory syndrome.

"The deterioration in traffic is alarmingly fast-paced and widespread," said Giovanni Bisignani, IATA's director general. "Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand."

At the current rate, airline industry losses may be even deeper than IATA's earlier forecast of $5.2 billion for this year, Bisignani said. IATA said airlines reduced capacity but were unable to keep pace with the fall in demand.

Cargo traffic dropped 7.7 percent over the year-earlier figure, it said. The statement gave only the percentage changes, but not the actual numbers for this year and last.

The association said all major regions except Latin America reported a decline in passenger traffic. Latin American carriers had an increase of 1.7 percent, but that was "shockingly down from the 11.9 percent growth of the previous month," IATA said.

Up until August, the drop in international passenger traffic was limited to Asia Pacific carriers, IATA said.

African carriers had the largest decline in passenger traffic in September — 7.8 percent. Asia Pacific was next with a 6.8 percent drop.

North American airlines, which had been seeing a steady 5 percent growth in international traffic, had a drop of 0.9 percent, it said. The drop for European carriers was 0.5 percent.

Even though the Middle East's economy remained strong because of oil sales, traffic for its carriers dropped 2.8 percent because of a decline in passengers transiting through the region.

The Middle East was one of two regions reporting growth in cargo traffic. It went up 5 percent. The only other cargo gainer was Africa at 1.5 percent.

"The industry crisis is deepening, along with the crisis in the global economy," said Bisignani. "Airlines, like all other businesses, are facing enormous challenges."

IATA represents about 230 airlines, accounting for 93 percent of scheduled international air traffic.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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