Star Alliance carrier Austrian Airlines' traffic fell by 5.8% over the course of 2008, against a 5.4% cut in capacity.
The airline - in the process of a takeover by Lufthansa - transported a total of 10.7 million passengers, down 1.1%.
But while the carrier's figures confirm the effects of its move away from long-haul operations, it posted a strong traffic increase of 8.9% on its Central and Eastern European and Middle Eastern routes.
"It can safely be assumed that the sharp drop in demand, which was noticeable in November and December, will continue in the months to come," says chief executive Alfred Otsch.
"A comparison of individual traffic regions shows that only the 'Focus East' regions were able to report passenger increases for the year as a whole. This confirms that we are on the right path with our strategy."
In December the airline's passenger traffic fell by 6.5%, with a load factor essentially static. Austrian's load factor for the year was marginally down, to 75.2%, for the year.