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A China Airlines aircraft prepares to land at Tan Son Nhat airport in Vietnam's Ho Chi Minh city on May 14, 2014.

Jacob Thomsen/Reuters

The decline in oil prices should provide a boost to economic activity and passenger demand this year but softening business confidence is putting a damper on international air travel, says the trade group for the world's airlines.

Growth in global air travel volumes rose 6 per cent in November compared with the year-earlier period, up from 5.7 per cent in the previous month and ahead of its 10-year average growth rate of 5.6 per cent, according to the International Air Transport Association.

The more robust economies – notably that of the U.S. – are expected to benefit the most from the fall in oil prices, IATA said Thursday.

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"Nonetheless, the global growth outlook remains uneven and global business confidence has eased back in recent months," the Geneva-based group said.

"Against this backdrop, the positive trend in international air travel that was a feature during most of 2014 has flattened."

November 2014 international passenger demand was up 5.4 per cent, but that is below the long-run average rate of 6.3 per cent and traffic has "broadly tracked sideways since August," IATA said.

The upward trend in global travel in the latter months of 2014 was powered almost entirely by domestic traffic, especially in China, according to the association. Domestic markets posted a 6.9-per-cent increase in demand over the previous November; in China, domestic travel jumped by 15.4 per cent in November.

Asia Pacific and African carriers have had the biggest negative impact over the past few months. Asia Pacific annual international traffic growth slowed to 4.9 per cent in November and traffic over the past four month has been flat.

"This has come amid signs of a slowdown in regional production activity, although trade volumes have remained strong." Annual growth for Asia Pacific airlines is likely to slow to about 4 per cent, IATA said.

Strong traffic levels on discount carriers in Europe helped that region's airline industry offset the impact of continued economic frailty; airlines posted a 5.6-per-cent annual increase in international traffic in November.

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"November demand was healthy, but the overall picture is mixed," IATA director-general and chief executive Tony Tyler said.

"For example, strong traffic performance within China and India has not carried over into international demand for Asia-Pacific carriers. And while lower oil prices should be positive for economic activity, softening business confidence is having a dampening effect on international travel."

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