ANA Holdings Inc. reported Friday a net loss of ¥51.16 billion ($470 million) in the April-June quarter as the coronavirus pandemic continued to dent travel demand, but cost-cutting and a robust cargo business helped the airline to limit the red ink.

The parent of All Nippon Airways Co. saw its net loss in the first quarter of fiscal 2021 nearly halve from a record quarterly ¥108.82 billion a year earlier. It incurred an operating loss of ¥64.61 billion, shrinking from a ¥159.07 billion loss a year earlier, while sales jumped 63.6% from the previous year to ¥198.91 billion.

ANA maintained its earnings forecasts for the current fiscal year through March. Following a record ¥404.62 billion net loss in the previous business year, the major Japanese airline expects a turnaround with a ¥3.5 billion net profit.

Air travel demand remains below pre-pandemic levels but has been picking up with some positive developments such as the launch of so-called “vaccine passports” in Japan, in which international travelers can use to prove that they are fully vaccinated against COVID-19.

The cargo business was a bright spot for ANA, capturing the pandemic-triggered demand for goods and home delivery. Cost-cutting efforts have progressed through the reduction of its fleet and canceling flights, the airline said.

“We are still in a severe situation for now but reservations (for flights) are on a rising trend from this summer,” Chief Financial Officer Ichiro Fukuzawa said at a news briefing.

Fukuzawa said ANA left its full-year earnings forecasts intact as travel restrictions are expected to remain. But he was cautiously optimistic about the outlook for domestic travel, saying that it hit bottom in June.

“It’d be better to be able to say the worst is over but the right assessment should be that we are emerging from it,” Fukuzawa said, expressing hope that higher vaccination rates would boost travel demand.

Despite travel restrictions, ANA registered a roughly 43.4% year-on-year increase in international passengers to 131,361, due partly to demand for connecting flights from Asia to the United States.

The country’s state of emergency has a strong bearing on domestic travel demand, but the number of domestic passengers increased 2.5-fold to 3.2 million.

Revenue in the international cargo business grew to ¥66.0 billion from ¥25.4 billion a year earlier, making it the third straight quarter for ANA to report record income.

Air transport of such items as semiconductors, electronics and auto parts increased during the pandemic, according to ANA.

With business trips canceled or postponed in the midst of the COVID-19 crisis, demand for international flights has sagged and is expected to take longer to recover than domestic travel.

The outlook for domestic travel is also far from rosy ahead of Japan’s mid-August summer holiday season, with a fresh COVID-19 state of emergency in prefectures such as Osaka hit by surging coronavirus cases.

The ongoing Tokyo Olympics — scheduled through until Aug. 8 — proved to be disappointing for airlines as foreign spectators were banned, along with domestic fans at most of the competition venues.

While the global airline industry has continued to face tough times, some U.S. airlines like Delta reported profits in the April-June quarter thanks to a recovering travel demand.

ANA’s domestic rival, Japan Airlines Co., is scheduled to release its first-quarter earnings next week.

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