MONTREAL -- Air Canada (TSX:AC.B) saw a greater percentage of empty seats on its flights last month compared with a year ago as traffic on Canada's largest airline slipped more than it cut capacity.

The Montreal-based company reported Tuesday that its a system load factor for July was 85.9 per cent, down from 86.4 per cent a year ago.

In contrast, Calgary-based rival WestJet Airlines (TSX:WJA) showed improvements in all of July's key performance measures compared with July 2011.

Air Canada's lower load factor came as traffic fell 1.1 per cent and capacity was cut 0.5 per cent compared with a year ago.

"This result is close to last year's record load factor for the same month and underscores our continued disciplined approach to managing capacity," Air Canada president and chief executive Calin Rovinescu said.

Air Canada reported its load factor on its U.S. and flights across the Atlantic dropped to 80.1 per cent and 87.5 per cent respectively, down from 81.2 per cent and 89.5 per cent.

Domestic flights improved their load factor to 84 per cent, up from 83.1 per cent a year ago, while flights across the Pacific improved to 91.5 per cent from 91.2 per cent.

Meanwhile, WestJet (TSX:WJA) reported a July load factor of 85.3 per cent, up from 81.6 per cent in July 2011, even as the airline increased capacity by two per cent compared with a year ago.

Traffic on WestJet improved 6.6 per cent compared with July 2011.

"Demand remains strong and momentum continues at WestJet with another record load factor and strong year-over-year traffic growth," commented WestJet President and CEO Gregg Saretsky.

Regional carrier Porter Airlines reported a July load factor of 70.1 per cent, up from 66.8 per cent a year ago.

Capacity at the airline, based on Toronto's waterfront, increased 12.9 per cent for the month, while traffic increased 18.3 per cent.

"The peak summer travel season is meeting our expectations with strong demand projected for coming months," Porter president and chief executive Robert Deluce said.