GENEVA (REUTERS) - Global air travel demand growth will slow again this year, but freight markets will recover from a decline last year, the International Air Transport Association (Iata) said on Thursday.

"2013 will not be a banner year for profitability, but we should see some improvement on 2012," Iata chief executive Tony Tyler said in a statement.

Global passenger traffic grew 5.3 per cent last year, Iata said, with domestic demand up 4 per cent and international demand up 6 per cent. This year, it is expected to grow by 4.5 per cent overall.

Although fuel costs remain high, airlines tightened up on spare capacity and spare seats last year to protect their profits, Iata said. The year ended with markets improving, with international freight and passenger traffic 0.6 per cent up from November.

Domestic passenger traffic grew by the same margin, but domestic freight deliveries rose 2.2 per cent on the month.

For the year as a whole, global cargo demand contracted by 1.5 per cent, including a 1.9 per cent decline in international markets and 1.4 per cent growth on domestic routes.

"A sharp slowdown in world trade growth and shifts in commodity mix favouring sea transport placed further downward pressure on air freight demand in 2012," Iata said.

Iata's members include major airlines such as Air France KLM , British Airways, Delta and Air China.