British Airways' (BA) traffic, measured in passenger seat kilometres, dropped by 2.6% last month.
It is the first time since February BA's figures haven't been affected by ash or strike disruptions.
Of the regions, Asia Pacific recorded the largest drop, of 14.1%, while Europe and the Americas dropped by 0.2% and 1.2% repectively
Some 3,200,000 passengers travelled with BA in July, a 0.4% drop on July 2009.
The number of passengers in Europe showed signs of improvement for the airline, after rising by 0.9%, from 1,990,000 to 2,010,000.
British Airways is on track for its merger with Iberia, confirming it should take place before the end of this year, after receiving European Union approval in July.
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