Air traffic on both domestic and international sectors in the ‘aviation powerhouses’ of India and China have continued to decline even during the ongoing festive season, though the traffic outlook for the future has improved irrespective of growing costs.

According to latest data, the percentage year-on-year domestic traffic growth rate in India continued to fall since November last year and stood at about minus 15 per cent this July compared with plus ten in the same month last year.

International traffic growth rate in the country, however, remained on the positive side, hovering between 20 and 10 per cent, as per figures of the Airports Authority of India (AAI) and the Centre for Asia Pacific Aviation (CAPA).

The price-sensitive travellers, who had just started embracing air travel as a viable alternative to ground travel, were "effectively priced out", CAPA said in a latest report, adding that India and China have witnessed "deep downturns this year" primarily due to state-controlled fuel prices, which have upped travel cost.

"Airlines in both countries have struggled financially this year, although China's carriers had bigger currency gains than their Indian counterparts that helped cushion the traffic downturn," the CAPA report said.

For airlines in both the major Asian nations, "the last two to three months have seen currency markets change course, which will exert even greater pressure on earnings in the latter part of the year," it said.