GENEVA, July 31 (AFP) – International air passenger traffic fell by 7.2 percent in June over 12 months, with the swine flu pandemic adding a blow to an airline industry already depressed by the economic crisis, IATA said.

''These are extremely challenging times for airlines. There are no signs of an early economic recovery,'' said Giovanni Bisignani, director-general of the International Air Transport Association (IATA).

''Other external risks are potentially great, including rising oil prices and the impact of Influenza A(H1N1) on demand,'' he added.

IATA estimated that the effects of swine flu shaved up to four percentage points off growth rates for Asian-Pacific carriers in June, when a 14.5-percent fall was reported compared to the figure for the same month a year ago.

Latin American airlines posted a 4.7-percent drop in passenger demand, but this is ''significantly better'' than the 9.2-percent plunge in May, said IATA.

IATA said there were ''early indications'' that the Latin American region was beginning to recover from the impact of swine flu but pointed out that there was ''still uncertainty around the spread of Influenza A(H1N1) and its effect on travel.''

North American carriers also saw the sharp decline in traffic ease in May, with demand falling just 6.7 percent in June compared to 10.9 percent in May.

European carriers meanwhile posted a fall of 7.1 percent, compared to the May drop of 9.4 percent.

IATA said that even though the sharp decline in demand slowed in June compared to the rate in previous months, airlines had not reduced their capacity to match the fall.

''As a result, June revenue on international markets fell by a shocking 25-30 percent,'' it said.

Meanwhile, international air cargo traffic was down 16.5 percent, a 13th month running of contracting demand.

''There has been some improvement in world trade and, after adjusting for seasonal fluctuations, freight volumes rose six percent from the low point recorded in December 2008,'' IATA said.

Air cargo traffic has fallen for 13 consecutive months on a year-on-year basis, reflecting both fewer shipments of goods for sale and the reliance of some exporters on more ocean transport during the recession, which has weakened consumer demand.

''At the current pace, it will likely take several years before demand returns to early 2008 levels,'' IATA said of cargo.

At the current pace, air cargo traffic would take ''several years'' to return to early 2008 levels, it added.

In its latest monthly reading of cross-border traffic, IATA said it could take years for air freight – a leading indicator of the health of world trade – to return to 2008 levels.

''These are extremely challenging times for airlines. There are no signs of an early economic recovery,'' IATA said, warning that continued weakness could spell trouble for carriers.

IATA said there were some signs of increased activity in China and other emerging Asian countries in June, but said these were eclipsed by weakness in Europe and North America where consumers ''choose to repay debt rather than increase spending.''

Airlines have been slashing fares in both business and economy class to encourage people to keep flying during the recession, and ''after years of cost reduction, the scope for further cuts is limited,'' IATA warned.

''Flexibility is critical in finding new sources of capital and new markets,'' it said.