THAAD Retaliation

[Anchor Lead]

In the latest move of what appears to be retaliation against the scheduled deployment of the U.S. THAAD missile defense system, Beijing has banned Chinese travel agencies from selling package tours to South Korea. Chinese cruise ships will be banned from entering South Korean ports. As a result, South Korea's cruise and airline industries are expected to suffer a severe blow this year.

[Pkg]

This cruise ship capable of carrying 3,000 passengers was scheduled to make 14 visits to Busan port by the end of this year. But all the trips have been canceled. The cancellation was made following the Chinese government's ban on Chinese cruise ships from entering South Korean ports.

[Soundbite] Choi Hee-gon(Executive, Cruise Tour Agency) : "It appears that new schedules are being devised in which ships return to China after staying in international waters and stopping by one Japanese port."

According to data, a total of 208 port entries to Jeju and Busan have been canceled. It is also highly likely that the number will further grow. Some 330,000 Chinese tourists have had to cancel their plans to visit South Korea. South Korean airline companies have decided to temporarily reduce flights to and from China. It's due to the Chinese government's ban on the sale of package tours to South Korea going into effect on Wednesday. Another factor for the decision is the dwindling demand for trips to South Korea amid growing anti-Korean sentiment.

[Soundbite] Chinese Tourist : "I oppose the U.S. THAAD anti-missile system. So I will not visit South Korea once it is deployed."

Korean Air is trimming 79 flights on eight routes to China beginning Thursday, citing decreasing reservations. Asiana Airlines says it will cut 90 flights on 12 different routes from Wednesday. And flights will be halted altogether for the time being on three routes between South Korea and China. The South Korean government is working to devise countermeasures. The situation will likely affect other related industries like duty free shops, tour buses and restaurants.