The standoff between China and Japan threatens to exacerbate a seasonally weak period for Chinese airlines and make it harder for them to post their first annual profits in six years.
Tensions between Beijing and Tokyo flared after recent remarks by Prime Minister Sanae Takaichi on Taiwan, prompting China to order curbs on flights to Japan among economic retaliatory measures.
¡°This setback will undoubtedly result in an earnings hit, creating downside risk to current consensus projections,¡± said Jason Sum, an analyst at DBS Bank. He expects earnings pressure to continue through early 2026.
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