Chile's dominant carrier LAN Airlines said on Thursday its passenger traffic increased 4.7 percent in July over a year ago, as international traffic rose, but domestic traffic declined.

The company said capacity on its passenger flights rose 6.9 percent in the same period, meaning its load factor decreased by 1.6 percentage points to 77.5 percent.

The company said international passenger traffic accounted for some 88 percent of total passenger traffic and rose 5.8 percent in July as capacity rose 8.2 percent.

LAN Airlines, one of Latin America's biggest, flies throughout the Americas, to Europe, Australia and the South Pacific.

LAN said domestic passenger traffic declined 3.4 percent as capacity was reduced by 1.0 percent, meaning domestic load factor decreased 1.7 percentage points to 67.3 percent.

Higher competition from new carriers in Chile has affected LAN's domestic traffic in the last year.

Cargo traffic rose 5.4 percent, which the company said was mainly due to the expansion of imports into the region, offset by weak exports from Chile and Brazil.