Geneva, Apr 3 (IANS): Despite its continuing financial woes, India's aviation sector logged 12.3 percent growth in February, the second fastest among major domestic markets in the world, the International Air Transport Association (IATA) said Tuesday.

"India experienced the second strongest growth among the major domestic markets at 12.3 percent," IATA said, reporting global traffic results for February 2012.

"This lagged behind the 16.3 percent increase in capacity over previous-year levels. Nonetheless, India's carriers filled 75.4 percent of seats. The strong traffic growth masks financial weakness resulting from high operating costs and taxation."

Globally, the traffic monitor reported an increase of 8.6 percent rise in passenger demand and a 5.2 percent growth in cargo demand in the period under review as compared to the corresponding month of 2011.

In comparison to January, last month saw an increase of 0.4 percent of passenger demand and a decline of 1.2 percent in cargo demand globally.

"Global passenger capacity expanded by 7.4 percent compared to previous-year levels, lagging behind the 8.6 percent increase in demand."

IATA added that weak economic conditions and rising fuel costs has hurt business confidence of the sector.

"Weak economic conditions and rising fuel costs are a double-whammy that an industry anticipating a 0.5 percent margin can ill-afford," said Tony Tyler, director general and chief executive, IATA in a statement.