International cargo traffic plummeted by 22.6 per cent last month compared to a year earlier, an 'unprecedented and shocking' free fall that signals a broader slump in world trade, according to new industry data.

The International Air Transport Association (IATA) said on Thursday airlines faced one of their toughest years ever, with cross-border passenger traffic dropping 4.6pc year-on-year last month, even after a boost from advance bookings of holiday travel.

The data is also bad news for the broader global economy - in value terms, a third of world trade is in goods sent by air.

'Keep your seatbelts fastened and prepare for a bumpy ride and a hard landing,' warned IATA director-general Giovanni Bisignani.

'The 22.6pc drop in international cargo traffic in December puts us in uncharted territory and the bottom is nowhere in sight,' Bisignani, former chief executive of Air Italia, added.

All regions showed major declines in international freight traffic, according to IATA. Asia-Pacific carriers, who make up 45 per cent of the air cargo market, were hit hardest.

'The collapse in the airline industry's freight business is a reflection of 20-30pc declines in export and import volumes being reported across Asia, North America and Europe as the global recession plumbs new depths in December,' it said.

Global airlines are set to post $2.5 billion in losses this year after suffering a $5 billion loss last year, according to IATA whose 230 member airlines account for 93 per cent of scheduled international air traffic.-TradeArabia News Service