The Mexico-centred swine flu outbreak may not hit airline traffic as hard as did the 2003 severe acute respiratory syndrome (SARS) epidemic but, compared with SARS, this episode comes as carriers are already under heavy financial pressure, warns ratings agency Standard & Poor's
S&P credit analyst Philip Baggaley says: "Although swine flu has not yet caused health problems on a similar scale [to SARS], we believe airlines are at risk of suffering reduced traffic because of government-imposed quarantines and travellers' fears." S&P says that it will monitor the impact of swine flu on US and other rated airlines.
A Wachovia Capital Markets analysis echoes this cautious early assessment, saying reduced air travel volumes could hit spare parts demand, but "we do not believe [swine flu] is likely to result in a further reduction in the earnings estimates for those suppliers at this point, assuming the impact is limited to US/Mexican carriers but a more manageable impact on airlines globally." And, adds Wachovia: "We note that SARS's impact on air travel lasted about six months."
Early reactions to the outbreak include Argentina's order that passenger flights to Mexico be suspended until 4 May and Cuba's temporary ban on passenger flights except those transporting Mexicans leaving Cuba.
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Other countries are generally advising that people avoid all but essential travel to Mexico. The European Union has advised that people also avoid all but essential travel to parts of the USA where swine flu is present.
Europe's TUI has stopped all flights to Mexico until 8 May, Canada's WestJet has suspended services to Mexico until 20 June and Canada's Transat has stopped services there until the end of May.
Other carriers are making it easier for passengers to delay or cancel trips to Mexico.
Airlines are also trying to allay concerns by saying cabin crew are monitoring passengers closely for any signs of illness.
Some countries, such as Australia, are requiring that the aircraft captain report to the ground any passengers who have flu-like symptoms.
Airports, meanwhile, are screening passengers for flu-like symptoms.
International Air Transport Association director general Giovanni Bisignani says: "It's still too early to judge what impact swine flu will have on the [airline] bottom line. But it's sure that anything that shakes the confidence of passengers has a negative impact on the business. The timing could not be worse, given all of the other economic problems airlines are facing."
The World Health Organisation has increased the alert level to phase five, one step below pandemic level.
Swine flu has killed more than 150 people in Mexico and at least one person in the USA. It has quickly spread to at least another seven countries.
Source: Flight International
