Indian domestic traffic slipped 0.3 per cent in April compared to a year ago, latest data of the International Air Transport Association (IATA) said.
"This followed a sharp rise in March traffic attributable to fare discounting," the analysis said.
The air capacity mounted by Indian airlines or the number of seats offered in April fell 0.2 per cent, while passenger load factor (percentage of seats filled on each flight) remained unchanged at 75.5 per cent, it showed.
However, the international passenger demand was up three per cent compared to the year-ago period, as capacity rose 4.3 per cent. But load factor dipped one point to 77.8 per cent.
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Asia-Pacific carriers recorded an increase of 2.4 per cent on international traffic compared to April 2012, compared to a 5.7 per cent rise in March.
Growth in Asian trade volumes has also "flattened after a pick-up toward the end of 2012, it showed.
"Passenger demand continued to grow in April, extending the positive trend that has been developing since late 2012. ... Most indicators continue to signal further expansion in air travel," IATA Director General and CEO Tony Tyler said.