South Korea considers "measures" as China blocks charter flights

Amorepacific

02/01/2017 09:41

By Hyunjoo Jin 
    SEOUL, Jan 2 (Reuters) - South Korea's government and 
airline companies will meet on Tuesday to discuss China's 
rejection of applications by Korean carriers to add charter 
flights between the two countries for early this year, a 
government official said on Monday.     
    South Korean Finance Minister Yoo Il-ho said on Sunday he 
would look into whether China's decision, which came ahead of a 
traditional surge in Lunar New Year travel, was "related to" the 
planned deployment of a U.S. anti-missile system in South Korea. 
    Yoo told reporters there were "several suspected cases of 
non-tariff barriers" following last year's decision to deploy 
the U.S. Terminal High Altitude Area Defence (THAAD) system and 
South Korea needed to determine China's "real intention". 
    China's foreign ministry did not immediately respond to a 
request for comment on a holiday, while China's Civil Aviation 
Administration was not immediately reachable. 
    China worries that the THAAD's powerful radar can penetrate 
its territory and has objected to the deployment, which South 
Korea and the United States say is aimed solely at countering 
any threat from North Korea. 
    South Korean carriers Asiana Airlines  020560.KS , Jeju Air 
 089590.KS  and Jin Air, an affiliate of Korean Air Lines 
 003490.KS , said their applications for charter flights to 
China were rejected for January and February, with no reason 
given. 
    "It is regrettable," a spokesman at Jeju Air said. 
    The companies already operate scheduled flights to China but 
wanted to add charter flights at busy times. 
    The transport ministry had sent a letter to China's ministry 
seeking cooperation on the proposed flights and it would also 
meet the companies to ponder a next step, a ministry official 
said. 
    "We will hold a closed-meeting with major airline affiliates 
tomorrow morning to discuss measures," the ministry official 
said, without elaborating on what type of measures might be 
considered. 
    China Eastern Airlines  600115.SS  and China Southern 
Airlines  600029.SS  had asked South Korea to hold off on 
approving their applications to add charter flights in January, 
citing "a situation in China", said the official who is not 
authorised to speak to media and declined to be identified. 
    A China Eastern press official denied that it had asked 
South Korea to hold off approving applications to add charter 
flights. A China Southern media official was not immediately 
available.  
    The Korea Tourism Organization said charter flights 
typically accounted for 4 to 5 percent of available seats 
between the two countries. 
    "Travellers can switch over to regular scheduled flights, so 
we do not expect huge losses," said Han Hwa-joon, China team 
director.  
    Shares in South Korean cosmetics-related companies and 
airlines dropped on news reports of the charter denials. Korean 
cosmetics are a hot-selling item for visitors from China, South 
Korea's biggest source of tourists.  
    Shares in cosmetics maker Amorepacific Corp  090430.KS  were 
down 5 percent on Monday, their biggest daily percentage loss 
since Oct. 25 and Korean Air Lines Co Ltd  003490.KS  shares 
fell 2.2 percent to their lowest level since July 14. 
 
 (Reporting by Hyunjoo Jin; Additional reporting Yun Hwan Chae 
and Dahee Kim in SEOUL and Chen Aizhu in BEIJING; Editing by 
Tony Munroe, Robert Birsel) 
 ((hyunjoo.jin@thomsonreuters.com; 82-2-3704-5685; Reuters 
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net)) 
 
Keywords: SOUTHKOREA CHINA/AIRLINES