Fall in business confidence has affected air travel around the globe, including in India and China, which indicates further slowdown in passenger traffic in the months ahead, IATA said.

Maintaining that the decline in business confidence has been "widespread" including in these two countries, the global airlines' body said "lower levels are consistent with the decline in international trade and business confidence" as seen in recent months which was now generating a fall in business travel.

"This weakness in a key driver of business travel is widespread, affecting even the Chinese and Indian economies" where the confidence has "fallen sharply in recent months", the International Air Transport Association (IATA) said in its latest analysis of premium air traffic for August.

It said the major source of weakness appeared to be Europe, where economic conditions and business confidence have "deteriorated sharply".

Aviation markets within Europe and the North Atlantic saw the sharpest falls in premium traffic in August, it said, adding there was "a sharp fall" in the number of passengers travelling on premium seats after an "unexpectedly robust growth" in the second quarter this year.

It said the level of premium air travel was just 2.3% up in August last year, compared with 7.5% in July.

However, economy travel was not as severely affected as the growth rate declined from 5.5 to 3.7%, the IATA said, adding that this was a probable reflection of "some switching of seat class by business passengers" to economy.