THE International Air Transport Association (IATA) has reduced its expected losses for the global aviation industry by half to US$2.8 billion (US$1 = RM3.32) for this year.

Instead of the US$5.6 billion loss forecast made in December, IATA's revised figure reflects its optimism driven by stronger recovery in air travel demand seen in the first quarter of this year.

Passenger and cargo demands are expected to grow 5.6 per cent and 12 per cent respectively this year, after falling 2.9 per cent and 11.1 per cent respectively last year.

The overall improvements in the aviation industry are driven by economic recovery in emerging markets of Asia Pacific and Latin America.

Asia-Pacific carriers are expected to return to the black this year, with profits of US$900 million compared with last year's losses of US$2.7 billion. The better results are due to the rapid economic recovery led by China.

Meanwhile, overall demand for passenger and cargo markets are expected to grow by 12 per cent this year for Asia Pacific.