IATA has halved its loss forecast for 2010 following marked improvements in passenger numbers.

The International Air Transport Association (IATA) has halved its 2010 loss forecast from US$5.6 billion (£3.7bn) to $2.8bn following a marked recovery in global air industry passenger numbers.

This strong improvement has been attributed to the growth in passenger numbers within the Asia and Latin America air markets, with demand having increased 6.5% and 11% respectively in January. Both regions are expected to see demand grow by at least 12% this year.

In addition, IATA stated that prices have begun to align with costs, although these need to be “kept under control” as oil poses a “wild card”.

The weakest international markets appear to be North Atlantic and intra-Europe – both of which have continuously contracted since 2008 – with international passenger demand gains of just 2.1% and 3.1% during January. Premium travel is also suffering, at 17% below its early 2008 peak.

Giovanni Bisignani, IATA’s Director General and CEO, said: “The stark contrast between profitability among Asian and Latin American carriers while losses continue to plague the rest of the industry clearly demonstrates the fact that airlines have not been able to develop into global businesses.

“The restrictions of the bilateral system prevent the kind of cross border consolidation that we have seen in industries such as pharmaceuticals or telecoms. Airlines are battling the challenges of the financial crisis without the benefit of this important tool. It’s time for change.”