HONG KONG (Reuters) – Cathay Pacific Airways Ltd, the world's largest air cargo carrier, said cargo demand failed to peak in November for the Christmas season, with freight volume down 13.8 percent and the passenger outlook uncertain for 2012.

Cargo and mail volume fell for an eight consecutive month in November to 132,430 tonnes, Hong Kong's dominant airline said in a statement late on Wednesday.

Cargo load factor fell 6.3 percentage points to 65.3 percent as Cathay reduced capacity in the face of continued weak demand from its key Hong Kong and China markets.

''November is traditionally the busiest time for our cargo business in the build-up to the Christmas season in the United States and Europe, but the peak simply didn't arrive this year,'' said Cargo General Manager James Woodrow in the statement.

Factory output in China, Cathay's major cargo market, shrank again in December after new orders fell, a preliminary purchasing managers' survey showed on Thursday, entrenching expectations that manufacturers are struggling with waning global demand and tight domestic credit conditions.

However, demand within the region remained relatively healthy and a new service to Zaragoza in Spain got off to a good start, Woodrow said.

Passengers carried by Cathay and unit Dragonair rose 4.2 percent in November to a total of 2.27 million, but growth was slower than the capacity increase, lowering the passenger load factor 2 percentage points to 78.5 percent.

''Bookings for the upcoming Christmas travel peak are in line with expectations, but the outlook for the early part of 2012 is still very uncertain,'' said General Manager of The airline also noted that economy cabins were seeing some yield pressure.

''We believe passenger traffic growth will eventually dip into negative territory, prompting our sell rating on Cathay and a target price of HK$10,'' said RBS analyst Andrew Orchard.