GENEVA, Sept. 4 (AFP) – An upturn in air cargo demand this year has been driven by companies restocking inventories which have run low, industry group IATA said.

But this pick up would remain ''fragile'' as long as economic recovery is driven by the inventory cycle, and not by increased consumption and business investment, the International Air Transport Association added.

Air freight demand fell 11.3 percent in July, improving from the 19.3 percent average plunge recorded for the first seven months of the year.

IATA noted that the pick up in air cargo began from December, half a year ahead of the recovery in world trade which only began in June.

This pattern was already registered in 2002, when the global economy regained its footing following the September 11, 2001 terrorist attack.

''As manufacturers anticipate economic recovery time becomes more important and so inventories are restocked by air at the expense of ocean freight,'' it explained.

''However, the upturn remains fragile until the economic recovery broadens out from an inventory cycle to stronger consumption and business investment,'' it added.

IATA also said it was unclear if inventories had indeed run to the bottom, given that consumer and business spending have not picked up.

''This could for a time limit the strength of the upturn in air freight,'' it said.

It believed that the average decline in air cargo revenues would reach 25 percent for 2009, improving from the plunge of an average 35 percent in the first half.

''Since the low point was hit last December, air freight volumes have risen by 10 percent,'' said IATA's latest quarterly Cargo Market Analysis.

But part of the upswing came at the expense of yields, which fell by nearly 20 percent in the first half of 2009, as revenues on international air freight markets also plunged by some 40 percent over levels a year ago.

Stronger growth underway in many Asian economies has boosted domestic air freight markets in the region, it said.

Air freight data on both domestic and international markets now point to a consistent picture of stabilization in the first quarter, followed by an upturn in the second quarter which has continued into the first part of the third quarter, it said.

Shipments of semi-conductors are a good indicator, as computers and electronic goods represent a high proportion of air freighted goods, according to IATA.

Semi-conductors fell further than air freight and did not bottom out until the end of the first quarter, it said.

''However, during Q2 there has been a significant upturn, albeit to levels still over 20 percent below those seen at the same time last year,'' it said.