Several factors inflated February 2012 results and distorted comparisons with the year-ago period. These included weaker traffic during the Arab Spring a year ago and the occurrence of Carnival in Brazil in February, a month earlier than in 2011. Cargo demand was also subject to positive distortion by the occurrence of Chinese New Year in January which pushed some deliveries into February. When comparing to January 2012 levels, the picture becomes much more moderate, with passenger demand growing by 0.4 percent and cargo demand declining by 1.2 percent.

Global passenger capacity expanded by 7.4 percent compared to previous-year levels, lagging behind the 8.6-percent increase in demand. This has had a positive impact on load factors, which airlines have maintained at 75.3 percent - better than the 74.4 percent recorded in February 2011.

Freight demand continued to be relatively stable. This trend started to develop in September 2011 and is consistent with improvements in business confidence.

"The outlook is fragile. Improvements in business confidence slowed in February. This will limit the potential for business class travel growth and it implies that an uptick for cargo is not imminent. At the same time, airlines trying to recoup rising fuel costs could risk reduced volumes on price sensitive market segments. Weak economic conditions and rising fuel costs are a double-whammy that an industry anticipating a 0.5-percent margin can ill-afford," said Tony Tyler, IATA's Director General and CEO.

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