Chinese airlines finally fall from zero Covid policy

This Wednesday the shares of Chinese airlines fell between 1.3 and 3.9%, after the immigration authorities of the Asian giant announced that they would lift the restrictions on foreign visitors.

The measure will come into effect on January 8, and will put an end to the strict zero covid policy imposed by the Xi Jinping government.

Air China shares were the hardest hit in yesterday’s session, ending down 3.88% at $1.53 per unit. Shares of China Eastern Airlines followed, down 2.7% at $20.55.

Shares of Hainan Airlines and China Southern Airlines fell 1.6 and 1.3% respectively. Both China Eastern Airlines and China Southern Airlines trade on the New York Stock Exchange.

“The little stability in the policy against covid in China is the cause of the setbacks, however, the Chinese government has been characterized by unpredictable policies that go against market conditions and property rights, which generates uncertainty and an aversion to risk in the listings of various issuers within the Chinese stock market,” said Alain Jaimes, Senior Analyst at Signum Research.

The announcement had immediate effect, as the population was optimistic and turned to buying flights to international destinations. However, the measure did not cause the same effect in the political arena.

Countries like Japan, India and Malaysia had already announced that they would impose restrictions on travelers from China.

This Wednesday other countries such as Italy, Taiwan and the United States joined.

The US health authorities detailed that, from January 5, passengers over two years of age from China, Hong Kong and Macao must present a negative test carried out two days before their arrival in the United States. (With agency information)

victor.barragan@eleconomista.mx