¿Las siete plagas?

Air China, Singapore Air Shares Drop on Concern Over Swine Flu
Share | Email | Print | A A A

By Chan Sue Ling and Shani Raja

April 27 (Bloomberg) -- Air China Ltd., Singapore Airlines Ltd. and Qantas Airways Ltd. led declines by Asia-Pacific carriers on concern a growing number of swine-flu cases in the U.S. and Mexico may damp travel.

Air China, the world's largest carrier by market value, sank as much as 11 percent to HK$3.57 in Hong Kong trading and changed hands at HK$3.59 as of 11:15 a.m. Singapore Air, Asia's most profitable carrier, fell 4.7 percent to S$10.10 in the city-state. Sydney-based Qantas, Australia's largest carrier, dropped 4.8 percent to A$1.885.

Airlines, already struggling amid the global recession, face further declines in travel because of the deadly swine-flu outbreak in Mexico and the U.S. Panasonic Corp. and Sharp Corp. have told employees to avoid travel to Mexico, while the U.S. has declared a public-health emergency.

"Swine flu poses a risk to global airlines as discretionary travel gets cut back even more," said Ben Potter, a Melbourne-based analyst at IG Markets. "Customers look to avoid possible contact with infected persons and there's the possibility governments may urge a cutback in flights to help control the spread."

Singapore has tightened checks at its main airport to screen arriving passengers against the flu outbreak, while authorities in Japan will examine flights from Mexico, where the flu was first detected.

Economic Consequences

The disease has killed more than 80 people in Mexico, and 20 in the U.S. have contracted it. The number is likely to rise, Dr. Richard Besser, acting chief of the Centers for Disease Control and Prevention, said at a White House briefing yesterday.

Japan Airlines Corp., Asia's largest carrier by sales, fell 2.5 percent to 194 yen, while Korean Air Lines Co., South Korea's biggest, tumbled 5.2 percent to 38,700 won. The airlines said separately they will monitor the situation in Mexico.

"Travel gets impacted rather quickly and savagely during virus outbreaks," said Prasad Patkar, who helps manage the equivalent of about $800 million at Platypus Asset Management in Sydney. "The market clearly believes that the swine-flu outbreak will have economic consequences."

The Bloomberg Asia Pacific Airlines Index, which tracks the region's largest carriers, sank 4.4 percent on concern that the outbreak may be similar to Severe Acute Respiratory Syndrome, or SARS, which killed almost 800 people globally six years ago.

Reminded of SARS

"This swine flu reminds investors of the SARS outbreak in 2003," said Jack Xu, an analyst of Sinopac Securities Asia Ltd. in Shanghai. "It will curb air traffic on both domestic and international routes. Cutting travel is a basic precautionary measure when people face the threat of flu outbreak."

Yamaha Motor Co., the world's second-largest motorcycle maker, has asked employees to refrain from traveling to Mexico, while Hino Motors Ltd., Japan's largest maker of heavy-duty trucks, has decided to postpone business trips to the Latin American country.

Panasonic, the world's largest maker of consumer electronics, and Sharp ordered employees to avoid travel to the country. Sony Corp., the world's second-biggest consumer- electronics maker, told workers to avoid Mexico City, while Hitachi Ltd. recalled Japanese staff based in the country.

http://www.betaggarcian.blogspot.com/