India, which recorded a demand growth of 19.7 per cent in August, was described as "the top performer among domestic markets", latest figures analysed by the global airlines body, International Air Transport Association (IATA), showed.
India and Brazil, which followed in the domestic growth, together represented three per cent of worldwide air travel, it said.
In the international segment, passenger demand was up 4.5 per cent over August 2010, but this represented a significant slowing from the six per cent recorded in July.
Noting that the rate of decline in freight markets accelerated, the IATA said the 3.8 per cent contraction in freight markets in August was "more than double the pace of July's 1.8 per cent decline."
Comparison of August to July data clearly indicated the slowdown, showing that the total passenger market fell by 1.6 per cent in August compared to July. International markets declined by 1.8 per cent, while already weak domestic markets shrank by one per cent.
"The industry has shifted gears downward. The pace of growth in passenger markets has dipped and the freight business is now shrinking at a faster pace. With business and consumer confidence continuing to slump globally, there is not a lot of optimism for improved conditions any time soon," IATA Director General and CEO Tony Tyler said.
Asia-Pacific carriers reported 5.3 per cent demand growth which was slightly better than the year-to-date growth of 4.4 per cent, it said.