ANA Holdings, Japan’s biggest airline, swung to a third-quarter operating loss of 81.4 billion yen ($779.10 million), from a 40.7 billion yen profit a year ago, as fresh coronavirus travel restrictions sapped demand for flights.

The result for the three months to Dec. 31 was slightly better than an average 83.8 billion yen loss estimated by three analysts polled by Refinitiv.

ANA maintained its full-year forecast for a record operating loss of 505 billion yen. That compares with an average 472 billion yen loss forecast by 10 analysts, Refinitiv data shows.

Comparing the third quarter “to results from earlier in the year provides a clear indication that our recovery is already underway”, Chief Financial Officer Ichiro Fukuzawa said in a statement on Friday.

However, ANA said domestic traffic had begun to decline in December when a fresh wave of COVID-19 cases in Japan undermined an earlier recovery and led the government to end a subsidised tourism campaign.

ANA nonetheless has said that domestic routes would be the main source of income in the next business year.

The airline’s international routes are still flying with only a fraction of the passengers they had before the pandemic, while its international cargo revenues rose 30% in the first nine months of the financial year due to strong demand. ($1 = 104.4800 yen) 

Reuters