Air Berlin, Germany's second largest airline after Lufthansa, carried 11.7 percent fewer passengers in December as it reduced capacity.
Air Berlin is cutting seats, unprofitable routes and postponing aircraft orders as it tries to make a profit for the first time since 2007.
The airline said on Tuesday it reduced the number of seats on offer in December by 10.1 percent. Its load factor narrowed by 1.3 percentage points to 74.7 percent.
In the full year 2011, passenger volume rose 1.2 percent to 35.3 million, while the load factor improved by 1.8 percentage points to 78.2 percent.