Asia-Pacific aviation continues to grow as new carriers prepare to enter the market amid increasing demand for seats, figures from the International Air Transport Association (IATA) show.

Passenger demand was now outstripping available seats, the figures show.

Actual growth was up 6.9 per cent in March 2007 compared to a year earlier while available passenger capacity grew at 6 per cent.

Globally, passenger growth was up 7.8 per cent year-on-year.

Peter Harbison from the Centre for Asia Pacific Aviation said it was an incredibly good time to be in aviation considering the harrowing start to the decade which included terrorism and SARS fears.

"It's been extremely good news for all the airlines in the region," Mr Harbison said.

The figures showed there was plenty of room for the soon-to-arrive budget carriers in Australia.

"We are looking at massive, massive profitability on the airlines in the region," Mr Harbison said.

He said the only barrier to increased growth was capacity constraints including available aircraft, available crew and government regulation of routes.

"We are waiting for government to do something, get active ... we have outgrown ourselves."

While the passenger section of aviation was flying high, freight was lagging behind.

Mr Harbison said this was due to increased competition from fast sea freight and a weaker than understood US economy.

"The US economy has slowed considerably, despite the figures," he said.

Giovanni Bisignani, the CEO of the IATA, said in a statement: "The story for passenger traffic is based on strong economies driving the demand to travel for both business and leisure markets."

He backed Mr Harbison's analysis of the freight sector.

"For freight, competition for other modes of transport, particularly sea, is holding growth below our forecast of 5.5 per cent for 2007," he said.

"People want to travel and they are doing it in record numbers. The fact that airlines are meeting that demand with newer, more fuel-efficient aircraft and near-record load factors bodes well for the bottom line and should lead to an industry profit of US$3.8 billion in 2007," Mr Bisignani said.