Last year witnessed the biggest slump in air passenger traffic since World War II, according to the International Air Transport Association.

Passenger traffic dropped by 3.5% from a year earlier, while freight traffic fell 10.1%, reversing years of steady growth.

“In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen,” said IATA chief executive officer, Giovanni Bisignani.

“We have permanently lost 2.5 years of growth in passenger markets and 3.5 years of growth in the freight business.

Despite figures for December showed a rise in traffic of 1.6% on a year ago, Iata warned that 2010 would be a tough year for airlines across the world.

“The industry starts 2010 with some enormous challenges,” Mr Bisignani said. “The worst is behind us, but it’s not time to celebrate. Adjusting to 2.5 to 3.5 years of lost growth means that airlines face another spartan year, focused on matching capacity carefully to demand and controlling costs.”

IATA has forecast that airlines will lose $5.6 billion on a net basis this year after losing $11 billion in 2009.

The industry’s best performers were among the Middle Eastern carriers, which generated the fastest growth in passenger traffic, up 11.2% year-on-year.

The region’s carriers raised their share of the long-haul market by connecting traffic over their hubs, taking market share away from Western carriers, such as British Airways and Air France.

African airlines suffered the most in 2009, with passenger demand down 6.8%. Asia-Pacific and North American carriers saw demand fall by 5.8%, while European airlines suffered a 5% fall in demand. Latin American airlines experienced a 0.3% rise.

Iata has estimated that airlines collectively lost $11bn (£6.8bn) last year, and stand to lose a further $5.6bn this year.