Air New Zealand lifted passenger numbers by 2.7 per cent in August as an increase in volumes on domestic and trans-Tasman routes more than made up for a decline on long-haul routes.

The airline carried 1.01 million passengers last month, up from 978,000 in August 2010.

The passenger load factor, a measure of capacity utilisation, was unchanged at 81.9 per cent, the company said in a statement.

Revenue passenger kilometers (RPKs), a measure of demand, fell 2.8 per cent.


Demand fell most markedly on Asia/Japan/UK routes, with RPKs falling 10.7 per cent, and the airline said the Christchurch and Japanese earthquakes earlier in the year continue to "significantly affect passenger numbers on the Japan routes."

By contrast, RPKs on domestic routes climbed 4.9 per cent and total short-haul rose 5.8 per cent.

Shares of Air New Zealand fell 0.9 per cent to $1.10 and have tumbled 27 per cent this year. The stock is rated a 'buy' based on six recommendations compiled by Reuters, with a median target price of $1.48.

The airline carried 889,000 passengers on short-haul routes last month, up 4.7 per cent from August last year.

Domestic volumes rose 4.2 per cent to 649,000 and passengers on Tasman/Pacific routes rose 5.9 per cent to 240,000.

Long-haul passengers fell 10 per cent to 116,000, with Asia/Japan/UK volumes falling 8.5 per cent to 49,000 and North America/UK declining 11 per cent to 67,000.