Swine flu likely to impact airline bottom lines

Global - The global aviation industry, still bleeding from dipping passenger and cargo demand, is readying itself for another blow in the face of a possible swine flu pandemic.

"It's another kick in the teeth for travel and tourism. We could really do without this," Dale Lawrence, communications director for the Pacific Asia Travel Association (PATA) told AFP.

With the death toll in Mexico, the centre of the outbreak, at 159 at time of press, the World Health Organisation (WHO) raised its flu pandemic alert level from three to four, while Singapore raised its alert level from green to yellow.

The fear of a global pandemic has sent passenger demand spiralling downward again, with travel agents reporting tour cancellations to places like the US, Mexico, and New Zealand.

IATA believes rising concerns over swine flu might have a significant impact on carriers' bottom lines, but believes it is still too early to project what this impact might be exactly. "It is sure that anything that shakes the confidence of passengers has a negative impact on the business," said director general and CEO Giovanni Bisignani. "And the timing could not be worse given all of the other economic problems airlines are facing."

The association said March passenger demand fell to 11.1% below March 2008 levels. Airlines cut international passenger capacity by 4.4% during the month, resulting in an average load factor of 72.1%, 5.4 percentage points below the average load factor a year ago.

IATA said it was working with the WHO to "ensure an efficient response of the air transport industry to the challenges that swine influenza will present".

Singapore Airlines (SIA) also said it was making preparations in case of a global pandemic. With the experience from the SARS outbreak in 2003, an SIA spokesperson said staff have been briefed on the nature of the disease and are on alert for customers who appear unwell. It has also set up a taskforce to monitor the situation.

China too has stepped up supervision of the world's largest pig population. President Hu Jintao ordered the government to step up measures to prevent the virus entering China and control and possible outbreak to "ensure the people's health and safety", state television said in a report.

However the WHO said there were no confirmed or probable cases of the virus in China.