International air freight traffic was 4.8 percent lower in October than a year previously, while international passenger traffic grew 4.6 percent but at a slowing pace, the International Air Transport Association said on Monday.

Cargo is the story of the month, IATA Director General and CEO Tony Tyler said in a statement. Since mid-year the market has shrunk by almost 5 percent and this is far greater than the 1 percent fall in world trade. Air freight is among the first sectors to suffer when businesses' confidence declines.

Total freight traffic including domestic journeys fell by 4.7 percent in the month while passenger traffic including domestic journeys rose 3.6 percent.

Airlines have responded to weaker demand by cutting their freighter fleets, IATA, whose members include IAG , Air China <0753.HK>, American Airlines and Deutsche Post DHL , said in a statement.

But this has not stopped a steady and substantial 5 percentage point fall in freight load factors compared to their early 2010 peak, owing to capacity entering the market via wide-bodied passenger aircraft.

Asia-Pacific carriers, with about 40 percent of global freight markets, were the most exposed to volatility in volumes, but were still benefiting from Asia's dominance in trade flows and had the highest freight load factor in the world, at 58.8 percent.

Freight factors, showing how much of total capacity is used over the distance travelled, tend to be low because planes often return empty.

In international passenger traffic, IATA suggested the apparent strength might be unsustainable because European carriers saw 6.4 percent growth, much more than the global average, and that rate could be at risk from Europe's economic crisis.

With Europe accounting for 29.2 percent of global air travel, this suggests that the current overall strength in air travel is based on fragile foundations, said Tyler.

The weak euro has driven demand for flights into Europe in the past year and European airlines have taken advantage of that by providing more seats, with 8.1 percent extra capacity in October.

Asia-Pacific airlines increased capacity by 7.5 percent but saw a slower take-up rate than their European rivals, with a 3.8 percent increase in demand.

By contrast, U.S. carriers maintained capacity at around the same level as a year ago and saw international traffic decline by 1.9 percent.

Domestic passenger markets also grew slower, at 2.0 percent, than a 2.4 percent increase in capacity in October. Although that implies a less than enthusiastic take-up of newly available seats, October showed a slight improvement over 2011 to date.

In the first 10 months of the year, airlines filled seats for 79.4 percent of the total distance travelled on domestic flights. In October, that figure rose to 80.1 percent, helped by capacity cuts in the United States and Japan.

India, China and Brazil also saw above-average growth, but much slower than in the year to date. Brazil's growth has slowed fastest, at 6.4 percent in October compared with an average of 15.1 percent in the year to date.

Japanese domestic demand remained 7 percent below February, the last full month before March's earthquake and tsunami.

(Editing by Helen Massy-Beresford and David Holmes)

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