The world's airlines expect a recovery in passenger and cargo markets in the second half of this year, following slower traffic in the first quarter of the year that is seen to extend until the current quarter.

The current quarter, says a statement from the International Air Transport Association (IATA), is "likely to see continued depressed air travel markets" due to the recent earthquake and tsunami in Japan and the political upheaval in the Middle East and North Africa.

"Strong underlining economic trends," according to IATA director general and CEO Giovanni Bisignani, should support a recovery in air travel market in the second half of this year.

Mr Bisignani said the "big uncertainty" is the price of oil, although even with the price staying in the $120 a barrel range, "it appears that strong economic growth in markets outside of Europe is continuing."

The IATA leader says a strong demand from business for premium travel has sustained a 7.7 percent growth through February.

Still, he acknowledges that "many leisure travelers" are putting off flying because of the impact of high oil prices.

"The fragility of the situation is demonstrated by the considerably weaker 3.3 percent year-on-year growth in economy class travel in February," Mr Bisignani says, adding that the industry's 1.4 percent profit margin "leaves it vulnerable" in the face of volatile markets despite efficiency gains.

IATA has earlier reported that passenger demand worldwide rose in March by 3.8 percent from the year before, which was slower compared to the previous month's 5.8 percent.

With capacity expanding by 8.6 percent during the period, the slower rise passenger traffic meant fewer passengers per flight, resulting in an average load factor in March of 74.6 percent, down by 3.5 percentage points from the year before.

Meanwhile, international air freight expanded from the second half of 2010 until January 2011, reflecting the 10 percent growth in world trade during that period, according to IATA.

In February the rate of expansion fell to 1.8 percent from the year before, although in March a growth rate of 3.7 percent was posted, reflecting "more normal trading conditions [outside of Japan and MENA] during the month," IATA says.

In the Asia-Pacific region, which account for 43% of global freight markets, carriers saw air freight demand contracting by 0.6 percent in March compared to the previous year, which could be considered an improvement over the February decline of 5.4 percent, IATA says.

Cargo traffic carried in March by European carriers was up 6.1 percent year on year while that of North American carriers rose by 7.1 percent, the IATA data showed.