Etihad Airways shrunk its losses in the first half as the Gulf carrier continued to reduce costs while coping with a slower-than-expected travel recovery.

The Abu Dhabi-based airline posted a $400 million loss, half the size in the corresponding period last year, according to a statement. Operating costs were down 27% to $1.4 billion.

Etihad was pulling back from a disastrous expansion when the coronavirus hit in early 2020, sending the global aviation industry into crisis. During the first half, the company returned more planes to its fleet and added or restarted service to 10 destinations, even as the delta variant slowed the resumption of travel.

Etihad “continued to ramp up operations and are today in a much better place than this time in 2020,” Chief Executive Officer Tony Douglas said.

Over the past few years, state-owned Etihad abandoned plans to go toe-to-toe with Qatar Airways and Dubai-based Emirates in carrying people to every corner of the globe.

The airline is currently operating 64 aircraft, or about two-thirds of its pre-pandemic fleet, with Boeing Co.’s 787 Dreamliner at the core of its operations. Some planes will be indefinitely grounded.

Etihad said it carried 1 million passengers in the first half of the year compared with 3.5 million year ago, with an average load factor of almost 25%.

Despite the impact of the delta variant, the outlook is improving for Gulf carriers. Britain moved the United Arab Emirates to medium-risk status from high last week, unlocking one of Etihad’s key markets. The UAE also lifted a ban on transit passengers from countries in the Indian subcontinent.

“As soon as destinations are added to the Abu Dhabi green list or UAE travel corridors, we are seeing a three to six-fold jump in bookings in some cases,” Douglas said.