The year-on-year drop in international passenger traffic narrowed to just 0.3% in September, but the improvement is misleading because there was a steep falloff in the same month in 2008.

September saw the recent trend of shrinking declines continue, according to International Air Transport Association data. The year-on-year drop was less than the 1.1% fall in August, and the 2.9% reduction in July. However, September benefits from favorable comparisons, since traffic declined 2.9% year-on-year last September.

IATA believes the September 2009 numbers reflect a pause in economic recovery seen in the U.S. and elsewhere. “It is far too early to call this a recovery” for airlines, said IATA Director General Giovanni Bisignani. “The worst may be over in terms of the fall in demand, but yields continue to be a disaster and costs are rising.”

However, capacity on international routes remains a bright spot for the industry. In most regions, capacity cuts outpaced traffic drops or slight traffic gains. IATA says international load factors “have risen to pre-crisis levels, which should help to correct the precipitous fall in yields.”

Asia-Pacific carriers saw notable demand improvement, with international traffic up 2.1% in September compared to a 1.6% decline in August. North American airlines were essentially unchanged with a 2.4% drop, and European carriers saw the demand decline steepen to 4.2%, compared to a 2.8% fall in August. International traffic increased 18.2% for Middle Eastern airlines, although this was distorted by an earlier Ramadan.

Latin American airlines reported a turnaround from a 2.3% decline in August to 3.4% growth in September.

There was also sequential improvement on the cargo front. Cargo traffic on international routes declined 5.4% year-on-year in September, versus a 9.6% fall in August and 11.3% in July. However, the September numbers again benefit from favorable comparisons, as September 2008 traffic was down 7.7% compared to the previous year. Load factor for September 2009 was 50.8%.

Carriers in the Asia-Pacific, Europe and North America regions all improved versus August’s cargo declines, but were still down by 3.1%, 13% and 5%, respectively, year-on-year. Middle Eastern airlines reported 3.6% growth in cargo demand, with Latin American carriers saw a 1.8% climb.