Airlines are 'over the worst'

Aircraft have been parked in the desert during the downturn

The beleaguered airline sector is beginning to enjoy the first signs of a recovery as passengers return to the skies, figures from the International Air Transport Association (IATA) show.

But the massive slump in air traffic caused by the Sars virus and the war in Iraq will cause airlines to lose $6.5bn (£4bn) this year, IATA estimates.

"The industry turned the corner in June," said IATA's director general Giovanni Bisignani.

"Although we are still well below where we were at the same time last year, travellers are returning," he said.

Overall passenger numbers in June were 11.8% lower than in the corresponding month last year, but 21% up on May.

"The worst is over, but the road to recovery will be long," Mr Bisignani cautioned.

'Pent-up demand'

The Sars virus has had a big impact on the industry in recent months and is estimated to have cost the airlines a total of $4bn.

In June, Asian carriers transported more than a third fewer passengers than the previous year.

But that marks a significant improvement from May when passenger numbers were down by more than half on the year.

North American carriers suffered a 12.4% drop in ticket sales in June, but their European couterparts have almost returned to the same level as last year.

And airlines are now hoping that tourists will boost sales through the remainder of summer.

"We expect that traffic recovery will intensify through July and August as a result of pent-up demand and the northern hemisphere summer holiday season," IATA said.