ASIA-BASED airlines will experience reduced profitability in 2007 because of increasingly intense competition, predicted the Montreal-based International Aviation Transport Association (IATA) in a statement released in Sydney.

Aviation profits will fall from US$1.7 billion in 2006 to $1.2 billion this year, the global industry association said.

The statement, published by the Gulf Daily News, came with data showing Asia can expect industry-wide gains in international passenger traffic while continuing to lead in the global airfreight growth.

"Lower profits are due to the increased competition in the region as a result of liberalisation, aircraft deliveries and new entrants," IATA said.

Pakistan was expected to see the greatest advance at 8.2 per cent with China growing 8.1 per cent and India by 7.9 per cent while Australia would only gain 4.5 per cent, IATA said.