New Delhi, Dec 5 (IANS): The International Air Transport Association (IATA) said Friday that India's domestic market increased by 16.3 percent last month as a result of market stimulation by domestic carriers.

"Indian domestic traffic climbed 16.3 percent (October). Although this was a considerable slowdown compared to September year-over-year growth of 26.4%, it was still a strong result and reflects market stimulation by local carriers," IATA was quoted in a statement.

The country's domestic traffic spiked 26.3 percent in September.

According to IATA the growth rates potentially were attributable to revived confidence over the new business-supportive government, the generation of strong demand owing to market stimulation measures introduced by carriers.

According to IATA, India's domestic capacity in the month under review rose 3.4 percent when compared to October, 2013.

“International domestic travel demand rose 5.8 percent in October compared to October 2013, with the strongest growth occurring in China and India," IATA pointed out.

Tony Tyler, director general and chief executive, IATA said that the fall in oil prices, if sustained, could provide a much-needed operating cushion. But there are risks which must also be accounted for-including the proliferation of political instability.

Currently the global crude oil prices are hovering under $70 a barrel, as a result of decision taken by Oranisation of Petroleum Exporting Countries (OPEC) last week not to cut production in line with cartel leader Saudi Arabia's strategy to combat the US shale oil boom.

Data furnished by the civil aviation ministry, showed that domestic air passenger traffic increased by 18.31 percent in October to 59.25 lakh passengers - up from 50.08 lakh ferried in the corresponding month last year.

According to data furnished by the aviation regulator Directorate General of Civil Aviation (DGCA), year-on-year basis there was an increase of over 8.61 percent in the passenger traffic.

"Passengers carried by domestic airlines during Jan-Oct 2014 were 550.68 lakh as against 507.03 lakh during the corresponding period of previous year thereby registering a growth of 8.61 percent," DGCA said in a statement.

The data showed that low-cost carrier IndiGo achieved the highest market share at 31.9 percent followed by Air India at 19.5, SpiceJet at 17.3 percent, Jet Airways at 16.4 percent, GoAir at 8.5 percent and JetLite at 4.1 percent.

Regional carriers Air Costa and AirAsia India reported 1.1 percent market share each.