The dispute between China and Japan is still causing turmoil in the tourism industry as Japan Airlines announces it will be cutting flights to China amid further uncertainty. As a result, shares in Japan Airlines(JAL) slid on the news, just a few days after the airline had made a large IPO offering of shares. JAL had re-listed on the Tokyo Stock Exchange almost three years after a blockbuster bankruptcy.
JAL will reduce its flights to Beijing and Shanghai beginning 10 October to 27 October and a total of 12,000 seat reservations from September to November have been cancelled, Bloomberg reported. According to JAL airline officials, the airline would temporarily reduce flights from Japan to the Chinese cities of Beijing and Shanghai next month. While the airline did not confirm if cancellations were linked to the island dispute, they commented that the airline had been seeing travel patterns that did not fit typical travel demands for the period.
According to a Bloomberg report, 40% of planned trips to Japan have been cancelled in the past week forcing China Southern Airlines and other carriers to operate fewer flights to Tokyo. The dispute over the islands (Senkakus in Japan and the Diaoyu islands in China) as been somewhat inflamed by disaggreements of ownership and influenced by popular fishing grounds that are also believed to be rich in natural resources such as oil.
As protests continue to place public pressure on the situation, forcing some Japanese businesses operating in China over the past few days to suspend their operations. With China as one of Japans largest trading partner, where about 20% of Japanese exports last year were sold to mainland China, industry ratings experts warned that the credit ratings of Japanese auto and technology manufacturers could come under pressure if the dispute is not defused quickly.
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