Sat, Sep 22, 2012 - Page 15 News List

Japan Airlines reduces flights to China

Bloomberg

Japan Airlines Co (JAL) cut flights to China as a dispute over uninhabited islands in the East China Sea spurs travel boycotts and street protests. The carrier’s shares, which relisted on the stock market this week, tumbled.

The airline will reduce services to Beijing and Shanghai starting Oct. 10 until Oct. 27, it said by e-mail yesterday. A total of 12,000 seat reservations from this month to November have been canceled, said Sze Hunn Yap, a spokeswoman at JAL.

All Nippon Airways Co has no immediate plans to reduce flights, Ryosei Nomura, a spokesman, said by telephone.

Japan Air fell as much as 4.8 percent in Tokyo trading, dropping below its initial public offering price for the first time since returning to the stock exchange two days ago after an US$8.4 billion initial public offering. China Southern Airlines Co and other Chinese carriers have also pared services to Japan amid a boycott that prompted the cancelation of as much as 40 percent of planned trips to Japan last week by Chinese holidaymakers, according to Citigroup Inc.

“The announcement that JAL is cutting China flights triggered a surge in selling that added to an already weak showing in the morning session,” said Takashi Hiroki, chief strategist at Monex Securities in Tokyo.

Japanese companies have also closed shops and factories in China because of safety concerns and protests sparked by the spat over the sovereignty of the islands. Taiwan also lays claim over the islands known as the Diaoyutais (釣魚台) in Chinese and Senkakus in Japanese.

Cancelation rates for vacations in Japan may increase further ahead of weeklong Chinese holidays starting Oct. 1, Citigroup analysts Vivian Tao and Rigan Wong said in a note yesterday.

The effect on Chinese carriers will be “manageable,” they said.

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