HANOI, Sept 30, 2008 (AFP) - Demand for air travel continued to slow in August as the sector endures a 'perfect storm' of rising fuel costs and the global financial crisis, an industry group said Tuesday in Hanoi.

Passenger load factors fell to 79.2 percent from the 81 percent recorded over the same period last year as capacity growth outpaced demand, according to figures from the International Air Transport Association (IATA).

'This year is very difficult. The oil crisis is rising and the demand is falling,' said Giovanni Bisignani, IATA's director general and CEO.

Over the past few months, the slowdown has been so sudden 'that airlines can't adjust capacity quickly enough,' Bisignani said.

Air freight has declined for the past three months, led by Asia Pacific carriers posting a 6.5 percent decline in July and a 6.8 percent decline in August, the association said.

'The three-month decline, led by weakness in Asia-Pacific markets, is a clear indication that global trade is slowing down. This shows that the impact of the financial crisis is broad geographically and will worsen before it gets better,' Bisignani said.

IATA members made a profit of 5.6 billion dollars last year after six consecutive years of loss of more than 40 billion dollars.

But 'with traffic growth continuing to decline, the industry is still heading for a 5.2 billion dollars loss this year,' Bisignani said.