The aerospace insurance market is still soft, but experts now believe falling passenger numbers are the main cause.

A report by Aon Aviation and Aerospace has found the soft market trends of 2007 and 2008 have continued, while harder conditions in the airline market are having little influence.

The aerospace premium declined by 2% in the third quarter, but while previous falls in the sector have been attributed to falling prices it now relates to falling exposures.

Aon says with airports expecting passenger movements to be down by 12% and fuel supply to be down by 4% this financial year, there is less exposure and aerospace underwriters have reacted accordingly.