The battle over Australia's skies between Qantas Airways and Virgin Australia continues to eat into the Flying Kangaroo's revenues.
Although Qantas's monthly traffic figures published on Friday showed an increase in the number of domestic passengers, the extra seats that have gone into the market in recent times has resulted in a fall in revenue.
Passenger numbers on Qantas's domestic operations, which includes regional flying by Qantaslink, rose 5.9 per cent to 1.97 million in October, compared with the same month a year ago.
However its revenue seat factor - an industry measure for the number of passengers flown and how far they fly - fell 3.5 percentage points to 78.2 per cent.
The October 2011 traffic numbers included the impact of the grounding of the entire Qantas fleet as part of an industrial dispute with unions.
October marked the fourth consecutive month that the airline had reported a drop in revenue seat factor.
Across the group, which includes Qantas domestic and international, as well as Jetstar's Australian and overseas operations, passenger numbers rose 7.4 per cent, while revenue seat factor fell 1.6 percentage points.
"As previously disclosed, Qantas Group yield, excluding the impact of foreign exchange movements, is expected to be low in the first half of FY2013 compared to the first half of FY2012, largely due to increased capacity in the domestic market," Qantas said.
Yield is an industry term measuring average airfares per passenger.
Qantas shares were 0.75 of a cent higher at $1.3275.