Air New Zealand Ltd carried 2.8 per cent more passengers last month than in July 2010 as domestic and trans-Tasman flights were more popular.

The airline said it carrier 1.15 million passengers in July, 2.8 per cent more than the same month a year earlier, though revenue passenger kilometres was largely the same at 2,401 metres.

Those gains were underpinned by short-haul passengers, which rose 4.1per cent to 1.011 million, with a 3.2 per cent increase in domestic passenger volumes and a 6.7 per cent rise in trans-Tasman passengers.

That offset a 6 per cent decline in long-haul passenger numbers to 139,000, with the Asian, Japanese and U.K. routes hit hardest as they fell almost 11 per cent.

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Air NZ said the international passenger decline was mainly due to fewer Japanese travellers in the wake of the earthquakes in Christchurch and Japan.

There were 4 per cent fewer short-term arrivals in New Zealand in July, according to government data, with a strong currency acting as a deterrent to visitors and some tourists holding back on their travel plans until next month's Rugby World Cup tournament. The sporting event is expected to bring 95,000 visitors to New Zealand.

Shares in Air NZ were unchanged at $1.09 in trading today, and have dropped 28 per cent this year.

The airline is expected to post a 37 per cent slump in adjusted profit to $51.9 million when it announces its result on Thursday.