India's air passenger traffic dips amid global upswing

India's domestic air traffic dropped by 4.9 per cent in January even as the global aviation market as a whole showed an upswing, according to figures released by the International Air Transport Association today.

"India's domestic market was in negative territory with a 4.9 per cent decline in demand and 5.3 per cent capacity reduction," IATA said in its analysis of the January air traffic results.

Without naming Kingfisher Airlines, it said the decline was caused by "one of the major domestic players" effectively exiting the market, apart from weak economic growth, rising infrastructure costs and impact of high fuel prices "exaggerated by excessive taxation."

Meanwhile, global air travel demand rose 3.7 per cent in January from a year earlier and may pick up pace in 2013, IATA said.

"Passenger travel is growing in line with business confidence levels. Recent months have seen some positive economic signs emerge in both the US and China, and the euro zone crisis seems to have stabilised," said IATA chief executive Tony Tyler.

Challenges for the sector include high fuel costs and uncertain demand as the world's top economy the United States prepares to make across-the-board US government budget cuts.