Increased fuel surcharges and high air fares have drastically affected the domestic air passenger growth this year, according to a report by the Centre for Asia Pacific Aviation (CAPA).

The domestic air passenger growth was 11.2 percent in the first quarter of 2008, against 29 percent of the year-ago period, according to the CAPA.

Experts said increase in aviation turbine fuel and fuel surcharges have resulted in 20 percent increase in air fares, which has put pressure on the growth rate.

The report, covering emerging markets in Asia like China, Indonesia and India, sounded a warning for the aviation industry in the continent that the current year would mark a growth rate lower than in the last few years.

'Whether it is a spill-over from the US or the impact of rising costs of travel, or a combination of the two, it is clear Asia's big emerging air travel markets will have a soft year,' it stated.

However, the report is in contrast to a recent American Express study, which said the average domestic air fares in the country were down by nine percent in the first quarter of the on-going calendar year against the corresponding quarter of 2007.