Demand for flights within Asia has outstripped the North American air sector for the first time, led by growth in China and India.

There were 647 million air travellers in the intra-Asia market last year, surpassing the 638 million passengers within North America, the International Air Transport Association said Monday.

“Achieving Asia-Pacific’s tremendous potential is contingent upon short-term efforts to battle the impacts of the economic downturn with cost reductions and efficiency gains. Longer-term, Asia-Pacific must also face global challenges including environment, security and liberalization,” IATA director general Giovanni Bisignani said in a statement.

IATA is forecasting that 2010 will still be a rough year financially for global carriers, but Asian airlines are positioned to slash their losses faster than elsewhere. Asian carriers could see their losses decline to $700-million (U.S.) this year from a $3.4-billion loss in 2009.

“Asia-Pacific’s prospects are improving faster than other regions,” Mr. Bisignani said.