oneworld Tail Fins including Mexicana

The International Air Transport Association (IATA) says the industry should remain cautious of two big risks this year, despite starting 2012 with a 5.7 percent rise in air travelers during January compared to the same month last year.

Association’s chief executive Tony Tyler explained the rising cost of fuel and the European debt crisis will continue to haunt the industry this year explaining the two factors will hang “over the industry’s fortunes like the sword of Damocles”.

For the first month of the new year, airlines saw international demand pick up to 5.5 percent, a number lead by Chinese New Year passengers, according to the Group.

Despite political turmoil still taunting the region, Middle Eastern airlines saw the largest growth in January compared to last year with a 14.5 percent increase in international passengers, followed by Latin American carriers with a 7.9 percent rise and Asia-Pacific airlines with a six percent rise.

The weak economy did not slow down business for European airlines with a 5.3 percent gain in international traffic while North American and African airlines experienced dips in passenger numbers of 0.3 percent and 3.6 percent.

Last year’s quake continued to impact Japan’s domestic count with traffic down eight percent compared to January levels last year while Brazil saw a double digit growth of 10.5 percent.