GENEVA (Reuters) - The growth rate for premium air travel fell significantly in March from the previous month because of the Japan tsunami and earthquakes and Arab world unrest, the International Air Transport Association (IATA) said on Monday.

The number traveling business or first class on international markets was 2.9 percent higher year-on-year in March, compared with a 7.8 percent year-on-year rise in February and 9.1 percent in the fourth quarter.

IATA had already reported overall growth in international air passenger traffic slowed in March in response to the events in Japan and the Middle East and North Africa.

Economy traffic dropped to 1.1 percent in March, from 3.4 percent in February and 5.9 percent in the fourth quarter.

"The decline of economy travel over the past five months is more of a concern than the recent fall in premium passenger numbers," IATA said in a statement.

"Fuel prices rose $40 per barrel over this period and airlines attempted to recoup these higher costs. The adverse impact of this on price-sensitive economy travel is apparent."

Business travel was still strong on many markets, IATA said, and estimated that without the news events of Japan and the Middle East, premium travel would have grown by 5 percent or more.

Noting premium travel usually grows in line with world trade, which was still growing, IATA predicted premium travel would reach 5-6 percent growth in the second half of the year.

The second quarter could remain weakened by events in Japan, although the comparison with the volcanic ash cloud affected period last year will exaggerate the April year-on-year growth rate.

(Reporting by Barbara Lewis; Editing by Mike Nesbit)