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Major travel agency H.I.S. Co. said Monday its sales plunged 80.5% to ¥38.86 billion ($356 million) in the November-January quarter from a year earlier due to a sharp decrease in travel demand caused by the continuing novel coronavirus pandemic.

H.I.S. logged an operating loss of ¥11.68 billion and a net loss of ¥7.98 billion in the three months through January, as the virus hit the tourism industry hard.

Governments around the world have restricted the entry of travelers at their borders in a bid to contain the COVID-19 disease, while the Japanese government suspended its nationwide travel subsidy program, aimed to help the tourism sector, on Dec. 28 due to a resurgence of virus infections across the country.

H.I.S. saw its domestic travel upbeat in November and December thanks to the Go To Travel campaign. But sales dived when the program was halted and another state of emergency declared by the government in January in the Tokyo metropolitan area and some other prefectures.

Under the state of emergency, people are asked to stay home and restaurants and bars to close by 8 p.m. The emergency has been extended to March 21 in Tokyo and the neighboring three prefectures.

In its earnings result released Monday, the company said its sales in the travel division in the first quarter of the business year through October 2021 nosedived 89.5% to ¥18.41 billion and incurred an operating loss of ¥9.39 billion.

The travel agency, which has continued to reduce its branches in and outside Japan as part of its restructuring efforts, withheld an earnings projection for the current business year due to the uncertainty in its business environment.

H.I.S. also said it will suspend implementing changes in its management scheme and instead focus on having the current management ride out the pandemic. It was set to change to a holding company structure on Nov. 1.

In the last business year through October 2020, H.I.S. posted a net loss of ¥25.04 billion, its first red ink since its listing in 2002, on sales of ¥430.28 billion, down 46.8%.

Among other Japanese travel agencies, JTB Corp. said last month it will slash its capital to ¥100 million from over ¥2.3 billion, which will be effective on March 31, to make it eligible to gain a tax advantage offered for small and medium-sized companies.

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