Global airline organization IATA said on Wednesday that while passenger numbers on all international routes in January - usually a busy travel season - rose 5.7 percent year on year, major uncertainties lay ahead.

European air traffic body Eurocontrol, which oversees an estimated 40 percent of world passenger and cargo routes, said it had cut its forecast for 2012 flight numbers to a decline of 1.3 percent from growth of 2.5 percent.

The figures from Geneva-based IATA, the International Air Traffic Association, showed air cargo volume - a good indicator of the health of world trade - was down 8 per cent in January over the same month last year.

Earlier this month IATA reported that in 2011 as a whole air traveller numbers rose by 6.9 percent on international routes operated by its 240 members, who account for 84 percent of world passenger traffic, while cargo fell 0.8 percent over 2010.

IATA director general Tony Tyler said the cargo decline appeared to be stabilising "albeit it at weak levels."

There was also hopeful news on business confidence which was having a positive impact on corporate travel.

"However, airlines face two big risks: rising oil prices and Europe's sovereign debt crisis. Both are hanging over the industry's fortunes like a sword of Damocles," Tyler said.

At Brussels-based Eurocontrol, head of forecast and traffic analysis David Marsh said Europe's economic weakness and the fuel price "have already had a major impact on the airlines, which have cut back on the number of flights harder and faster than we had expected."

Eurocontrol predicted a drop in flights from 9.8 million in 2011 to 9.7 million this year, which would be the second annual decline since the global financial crisis of 2009.

Marsh said growth in numbers of flights landing in, taking off from, or flying over the vast Eurocontrol area was likely to resume slowly in 2013 but it would be 2014 before it got back to the all-time peak of 10 million achieved in 2008.

The airline industry has battled over the past decade to achieve steady profits but has had a bumpy ride due to the 2001 hijackings in the United States, global health scares, volcanic eruptions and economic instability.

Last December, IATA predicted its members - who do not include low-cost airlines taking an increasing slice of business in many regions - faced an overall loss of $8 billion this year.

(Reporting by Zurich bureau; Editing by Mark Potter)

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